Goldman Sachs Sees KOSPI Plunge as Correction, Targets 12,000

Goldman Sachs has assessed the recent plunge in KOSPI as a correction within a long-term bull market.

The global investment bank believes that the memory chip cycle and domestic corporations' earnings growth remain solid, justifying its 12-month KOSPI target at 12,000 points and an 'overweight' view.

According to Goldman Sachs' chief Asia-Pacific equity strategist Timothy Moe, a comprehensive review of various market factors shows that the current decline is excessively negative relative to reality.

The bank cited concerns about the sustainability of the memory cycle as the biggest cause of the plunge, which was exacerbated by selling by leveraged exchange-traded funds (ETFs) and short-term momentum investors.