Brokerages Quietly Raise KOSPI Target to 4,300 Amid Market Volatility

Korean brokerages are quietly expressing optimism by raising their year-end KOSPI forecasts in unison, even as the domestic stock market continues to fluctuate amid volatile conditions.

While concerns that had weighed on markets—including the U.S. artificial intelligence stock bubble debate, interest rate cut uncertainty, and overvaluation worries—have not been fully resolved, securities firms are pointing to gradual sentiment improvement as grounds for further index gains.

Kiwoom Securities (039490.KQ) presented a December KOSPI forecast range of 3,800 to 4,300 points in a recent report, according to the financial investment industry on December 7. Although the KOSPI index has been undergoing correction after falling to the 3,840 level on November 24, the brokerage maintains that expectations for expanded AI investment and rate cuts remain valid.

The firm noted that major U.S. AI value chain companies including Broadcom (December 12), Oracle (December 16), and Micron (December 18) are set to report earnings from mid-month, suggesting the market could embark on a "second-leg rally" if earnings momentum resurfaces.

Concerns have emerged over "borrowing to invest in AI" as Amazon and Meta recently issued large-scale bonds of $15 billion and $30 billion respectively to continue AI infrastructure investment. However, analysts suggest this risk is unlikely to trigger an immediate major shock.

"While we should be cautious about rising debt dependency, credit default swap premiums for major Big Tech companies excluding Oracle remain at low levels, demonstrating that growth expectations for the AI industry are still high," said Choi Jae-won, a researcher at Kiwoom Securities.

Changes in the policy environment are also fueling market expectations. U.S. President Donald Trump's nomination of Kevin Hassett, chairman of the White House National Economic Council, as the next Federal Reserve chair has raised hopes for rate cuts.

Reflecting this development, Korea Investment & Securities raised its December S&P 500 forecast band to 6,550-7,100 points, up from its previous estimate.

NH Investment & Securities (005940.KS) set its upper-end KOSPI forecast for next year at 5,500 points, predicting that improvement in the global economic cycle will benefit Korean companies.

"Expectations for industrial sector growth are rising as Trump's tariff policies lead to expanded capital investment in the U.S.," said Baek Chan-gyu, a researcher at NH Investment & Securities. "Korean construction and engineering companies including DL E&C and Samsung E&A are also expanding their entry into the U.S. market through joint venture establishment and local company acquisitions."