Seoul: South Korea's benchmark stock index closed the year over 70 percent higher than its starting point, marking its most significant return since the dot-com bubble, data showed Tuesday. The Korea Composite Stock Price Index (KOSPI) finished at 4,214.17 on the last trading day of 2025, up 75.7 percent from its Jan. 2 close of 2,398.94.

According to Yonhap News Agency, this growth rate is the highest since 1999, when the index surged 83 percent just before the dot-com bubble burst in 2000. The data highlights the strong performance of exchange-traded funds (ETFs) holding local stocks, which outperformed those invested in overseas markets. As per the Korea Exchange (KRX), the main bourse operator in the country, ETFs focusing on local stocks reported an average return of 64.8 percent, significantly higher than the 17.2 percent return recorded by those holding overseas equities.

The net assets in the KODEX200 ETF, tracking the KOSPI200 index, more than doubled from 5.5 trillion won last year to 11.7 trillion won in 2025, as reported by the KRX. Analysts project the KOSPI to sustain its upward momentum into 2026, driven by abundant global liquidity and government measures to boost the stock market. However, they caution that concerns over the profitability of artificial intelligence (AI)-related investments and uncertainties regarding the Federal Reserve's policy direction in the U.S. pose potential risks.

Kim Jong-min, an analyst at Samsung Securities, noted in a report, "The Fed's monetary easing cycle could end around the early half of next year. The possibility that market volatility could increase in the second half of next year is still open." Projections from South Korea's 11 major brokerages suggest the KOSPI will range between 3,500 to 5,500 next year, with the highest outlook from NH Investment and Securities forecasting the index to reach between 4,000 and 5,500. Hana Securities provided the lowest prediction, setting its target range at 3,750-4,300.