The KOSPI 200 Index held steady on Thursday as Asian stocks cheered the performance in New York a day earlier. The index, which tracks the biggest 200 companies in South Korea, rose to KRW 335, up by near 7% from its lowest level in December. So, what next for the KOSPI 200 index after the latest Bank of Korea decision?
Bank of Korea interest rate decision
The KOSPI 200 index has largely moved sideways in the past few weeks as investors have focused on the country’s political environment.
Just this week, the police arrested President Yoon Suk Yeul on corruption allegation charges. He is also being investigated for declaring martial law in December and for causing an insurrection, a crime that is punishable by life imprisonment or even death.
South Korea has been in a crisis since then, with two of Yoon’s predecessors impeached as well. This political crisis may impact the country’s economy as foreign investors stay away from the market.
The South Korean won (KRW) has also crashed hard in the past few months. It plunged to a low of 1,485 in December and has improved in the past few days to the current 1,450.
The latest catalyst for the KOSPI 200 index was the Bank of Korea’s interest rate decision. In it, the bank caught the market off guard by leaving interest rates unchanged at 3%, warning that the economy may not hit its target. Analysts were expecting the bank to cut interest rates by 0.25%.
The rate pause came as recent data showed that the country’s inflation was ticking upwards. These numbers showed that the headline Consumer Price Index (CPI) rose from 1.5% in October to 1.9% in November, higher than the median estimate of 1.7%.
South Korean stocks performance
The KOSPI 200 index rose slightly, mirroring the performance of American equities. On Wednesday, the Nasdaq 100 index jumped by over 466 points, while the Dow Jones jumped by over 700.
This performance happened after the US released encouraging inflation data. The core consumer inflation figure retreated from 3.3% to 3.2%, a small but crucial move since it has remained at 3.3% in the past few months.
Still, that inflation report will have a minimal impact on the Federal Reserve since inflation remains stubbornly high. The headline Consumer Price Index (CPI) rose from 2.7% to 2.9% in December.
Many KOSPI index companies have risen this year, with some having big moves in the past two weeks. OCI Co, a top chemicals company, has soared by 43% in 2025, while Hanwha Ocean has jumped by 37%.
Hanwha Aerospace stock has jumped by 20%, while SK Hynix is LS Electric, and Cosmo Chem have all jumped by over 20% this year.
Samsung Electronic stock has risen by 2% even as the company goes through major challenges like competition.
KOSPI 200 index analysis
The daily chart shows that the KOSPI 200 index bottomed at KRW 316 between November and January. It formed a triple-bottom pattern at that level and then bounced back to KRW 335.
The index has moved above the upper side of the falling wedge chart pattern, one of the popular bullish reversal signs. It has also moved above the 50-day and 25-day moving averages.
Therefore, the index will likely have a strong bullish breakout as investors buy the dip. If this happens, the next point to watch will be at KRW 350, which is about 4.7% above the current level.
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