KOSPI’s Forward P/E Falls Below 5 for First Time Among $1 Trillion Markets

South Korea’s KOSPI is the first benchmark among 18 markets valued above $1 trillion at the start of 2026 to post a forward P/E below 5, after the ratio fell to 4.2.

The forward price-to-earnings ratio compares share prices with expected earnings over the next 12 months. No benchmark in the 18-market comparison had previously dropped below 5.

A technology-stock sell-off amid cooling enthusiasm for artificial intelligence has pressured South Korean shares. The decline comes as the country’s exports move toward $1 trillion and demand for chips from SK hynix and Samsung Electronics remains strong.

Investors have been reluctant to pay higher valuations for those companies’ earnings. A low P/E ratio alone does not show that the market has reached a bottom, and the timing of any valuation recovery remains uncertain.