After surging more than 30% in April, South Korea’s benchmark KOSPI kept running in May, setting another record on the first trading day of the month. The move has undercut the market adage “Sell in May,” but investors are watching whether the rally can hold after such outsized gains, which have often been followed by sharp pullbacks.
According to the Korea Exchange, the KOSPI on May 4 jumped 338.12 points, or 5.12%, to close at 6,936.99, a record high by closing price. The index rose 30.61% last month, and the latest gain was driven by strong buying from foreign and institutional investors from the start of May trading.
In the main board market, foreigners were net buyers of 3.9623 trillion won and institutions bought a net 2.5569 trillion won, lifting the index. Retail investors, meanwhile, sold a net 6.3364 trillion won as they took profits. By stock, chipmakers led: SK hynix rose to a record 1.45 million won, while Samsung Electronics touched 230,000 won and climbed as high as 232,500 won.
Even amid the record run, some investors are again discussing a “Sell in May” approach. Historically, May has tended to see returns cool after strong gains from November through April, as institutions rebalance portfolios and lock in profits.
Recent market patterns highlight that risk. Last year, the KOSPI posted a historic 165.96% surge in April, but the gain slowed sharply to 5.52% in May. In 2024, a 1.99% drop in April was followed by another decline of 2.06% in May, as concerns about elevated levels weighed on prices.
With seasonal volatility often rising as investors digest earnings and the market shows fatigue after sharp moves, some analysts say April’s 30.6% return could again be followed by a pause in early May.
Brokerage forecasts are mixed.
Choi Bo-won, a researcher at Korea Investment & Securities, said earnings releases by top market-cap companies have largely wrapped up and tariff uncertainty could re-emerge, making a temporary pullback possible. Still, Choi said expectations for medium- to long-term earnings improvement could provide further upside, adding that even if there is a brief early-May correction, investors may consider re-entering large-cap IT and infrastructure shares.
Han Ji-young, a researcher at Kiwoom Securities, said investors should focus on macro indicators and fundamentals. Han said weak April employment data could be neutral or better for stocks because it may help cool the rise in the 10-year yield, which recently climbed into the 4.4% range, making the jobs data particularly important for growth-stock investors.
Han also pointed to improving earnings expectations, saying the 2026 KOSPI operating profit consensus rose 32% in a month to 850 trillion won. Han added that April export data delivered an earnings surprise led by semiconductors and solid-state drives, and said that with upside factors such as potential further upgrades to profit forecasts, it is appropriate to set a base-case outlook that the KOSPI continues to push to higher highs this week.
* This article has been translated by AI.
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