South Korea’s Kospi index has fallen sharply, losing 44% in just one month. The benchmark dropped from a June peak of 9,386 points to 5,263 points. The decline was caused by heavy foreign selling, concerns over an overheated global artificial intelligence rally, and forced deleveraging by retail investors using leveraged exchange traded funds. Despite this steep correction, Nomura remains confident about the future of the Korean market.
The brokerage has set a bold target of 10,000 to 11,000 points for the Kospi, which implies a possible upside of 90% to 109% from current levels. Nomura believes the next phase of growth will be supported by corporate buybacks, treasury share cancellations, stronger semiconductor earnings from the artificial intelligence cycle, and governance reforms that improve transparency and shareholder returns.
Buybacks are expected to reach 116 trillion won in 2026, with Samsung and SK Hynix accounting for nearly 90% of the total. Nomura describes the current situation as a reset rather than a reversal, shifting the market from a leverage‑driven bull run to a buyback‑driven rally.
Risks remain, including continued volatility and uncertain foreign investor sentiment. However, upcoming catalysts such as tax reforms and the release of a low price‑to‑book company list later this year could support recovery.
