Synopsis South Korea's Kospi index saw a significant jump on Friday, extending recent gains after a substantial crash. The benchmark index officially entered bear market territory earlier this week due to a sharp decline. Heavyweight semiconductor stocks experienced a notable crash, impacting investor sentiment and the overall market. Despite a recent rally, foreign investors remained net sellers of South Korean equities.APKospi continues to remain the world's best performing stock market of 2026 so far, being up around 76% this year so far despite the recent crash.South Korea's Kospi jumped nearly 5% on Friday to extend gains after a massive crash earlier this week that pushed the world's best performing market of 2026 into bear territory following a 20% drop from its recent peak.Kospi jumped to 7,643 points on Friday. South Korea’s benchmark index has now gained around 5.5% over two consecutive days, after falling as much as 10% between Monday and Wednesday.On Wednesday, the index officially entered the technical ‘bear’ market, falling more than 20% from its record close of 9,114.55 hit on June 22, as heavyweight semiconductor stocks including Samsung Electronics and SK Hynix crashed, spooking investors that the previous AI driven rally was overblown. Despite yesterday’s marginal recovery, Kospi technically remained in the bear market as it continued to be more than 20% lower than its recent peak.The sharp rally in the index has led to losses falling below the 20% threshold needed to be technically categorised as a bear market. This came as Samsung Electronics shares jumped more than 5%, while peer SK Hynix gained 2%. Battery maker LG Energy Solution climbed 5%.Hyundai Motor and sister automaker Kia Corp saw their share prices rise up to 5%, while steelmaker POSCO Holdings ‌jumped more than 7%.Also Read | Kospi enters bear market! What South Korea’s finance minister said after 20% crashForeign investors remain net sellersDespite the renewed optimism in South Korea’s stock market, some caution is warranted as overseas investors continued to remain bearish following the market’s strong rally this year. Foreign investors were net sellers of South Korean equities worth 529.1 billion won ($350 million).However, Kospi continues to remain the world's best performing stock market of 2026 so far, being up around 76% this year so far despite the recent crash. But the benchmark index is on track to record its third straight weekly decline after a volatile week driven by concerns over AI demand.What lies ahead for Kospi?"It seems appropriate to take the scenario of ⁠the stock market ‌re-entering a recovery path as the base case, as AI investment hopes are recovering and the rise in bond yields is being limited," Reuters quoted Han Ji-young, an analyst at Kiwoom Securities.Notably, Goldman Sachs remains positive on South Korea’s market outlook, citing improving earnings momentum across sectors beyond semiconductors. “Incremental foreign inflows have already begun rotating toward other AI-related beneficiaries and industrials, and we expect this trend to continue as investors seek exposure to the broader AI supply chain and opportunities that are uncorrelated with AI,” analysts said in a note, as quoted by Business Insider.Also Read | South Korea's Kospi enters bear market, plunges 20% from peak. What's spooking investors?(With inputs from agencies)(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)Read More News on(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price...moreless(You can now subscribe to our ETMarkets WhatsApp channel)Read More News on(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price...moreless