Today's Economic Briefing — 2026-07-01
The KOSPI hit a record 9,000 in the first half of the year, with analysts projecting it could reach as high as 12,600 by year-end. Meanwhile, the won-dollar exchange rate is testing the 1,560 level amid persistent foreign selling and dollar strength.
Financial Market Trends
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KOSPI crosses 9,000 for the first time: The KOSPI reached an unprecedented milestone in the first half of this year. Analysts have raised their year-end targets to as high as 12,600, fueling hopes for a "Manspi" (10,000 KOSPI) era, with semiconductors expected to lead the charge.
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Won-dollar exchange rate threatens 1,560 level: The won-dollar exchange rate is hovering near 1,560. While global dollar strength eased following reduced military tensions between the U.S. and Iran, persistent foreign dollar buying and quarter-end supply and demand pressures continue to drive the rate upward.
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Foreign investors net-sell over 143 trillion won in H1: Foreign investors net-sold more than 143 trillion won in the local market during the first half of the year, with concerns rising that this trend could continue into the second half.
Key Economic News
Shinhan Bank launches escrow service for foreign direct investment Shinhan Bank has introduced an "FDI-dedicated escrow service" to enhance transaction security and fund execution efficiency between foreign investors and domestic firms. This is seen as a financial innovation to lower entry barriers for foreign investment.
Government and companies unveil 4,755 trillion won "mega-investment" plan The government and major firms have announced a long-term investment plan totaling 4,755 trillion won. The plan focuses on balanced regional industrial growth, including semiconductors in Gwangju, robotics in Gumi, and batteries in Ulsan.
New policies taking effect in the second half Starting in July, the government will implement various economic policies, including expanded short-term childcare leave (starting August), a 4-million-won monthly stipend for essential doctors in regional areas, 24-hour foreign exchange market operations, and advanced AI-based screening systems.
Industry Highlights
Semiconductors: Key growth engine for the second half Analysts have identified semiconductors as the primary driver for KOSPI's growth. Increased AI investment and global demand recovery are expected to boost the earnings of domestic semiconductor firms.
Global markets post best Q2 gains in 6 years U.S., Asian, and European markets rose in unison, with the MSCI ACWI up 14%. Despite waning rate-cut expectations, strong earnings and economic resilience fueled global market gains.
AI investment drives increase in IT sector CAPEX Capital expenditure in the IT sector is expected to grow as the government and major companies expand investments to secure a competitive edge in the AI industry.
Expert Analysis and Outlook
Persistent dollar strength and upward exchange rate pressure Continued foreign selling and quarter-end supply/demand factors are pushing the exchange rate up. However, sustained trade surpluses and the inflow of SK Hynix ADR funds could serve as potential downward factors.
KOSPI uptrend bets on semiconductor earnings The market's bullish outlook for the second half is based on improvements in corporate earnings, particularly a recovery in profitability for the semiconductor sector. Global supply chain stabilization and the recovery in AI demand are cited as key positive factors.
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