Citigroup maintained its KOSPI target of 10,000 despite the recent sharp decline in Korean stocks, calling the downturn a technical correction. The investment bank stated on local time that most negative factors surrounding the market have peaked. KOSPI closed at 6,516.27 on the previous trading day, meaning Citigroup's target represents over 50% upside potential. The recent correction was driven by declines in memory semiconductor supplier stocks and broader market profit-taking, according to Citigroup, which described the pullback as a potential buying opportunity. KOSPI has fallen approximately 28% since recording an all-time high on June 22, including a 4.46% plunge on the previous trading day.
Citigroup Maintains KOSPI 10,000 Target Amid Market Decline
Citigroup maintained its KOSPI target at 10,000, representing over 50% upside from the previous day's close of 6,516.27. According to CNBC reporting on local time, Citigroup stated that most negative factors surrounding the Korean market have passed their peak, maintaining an optimistic outlook on Korean stocks.
Citigroup assessed that "the recent KOSPI correction is closer to a technical adjustment driven by market-wide profit-taking led by falling memory semiconductor supplier stocks" and "could rather be a buying opportunity."
KOSPI Records 28% Decline from June Peak
Korean stocks continued strong gains from last year through the first half of this year, recording the highest returns among major global markets. However, recent corrections occurred due to concerns about slowing artificial intelligence (AI) investment, concentration in top market capitalization stocks like Samsung Electronics and SK Hynix, and increased speculative trading by retail investors.
KOSPI has fallen approximately 28% since recording an all-time high on June 22. On the previous trading day, the index plunged 4.46%.
Citigroup evaluated that Korea's economic fundamentals and market-friendly policy environment remain solid.
Bank of Korea Raises Rates to 2.75%
The Bank of Korea's interest rate hike was identified as a burden factor for the market. The Bank of Korea decided last week to raise the base rate by 25 basis points to 2.75%. The central bank forecasted that inflation will remain above the 2% target for a considerable period as the impact of rising energy prices is reflected with a time lag.
FAQ
What is Citigroup's KOSPI target?
Citigroup maintained its KOSPI target at 10,000, which represents over 50% upside from the previous trading day's close of 6,516.27.
How much has KOSPI declined from its peak?
KOSPI has fallen approximately 28% since recording an all-time high on June 22, including a 4.46% plunge on the previous trading day.
What did the Bank of Korea decide on interest rates?
The Bank of Korea raised the base rate by 25 basis points to 2.75% last week, citing concerns that inflation will remain above the 2% target for a considerable period due to rising energy prices.
