UBS has slashed its 12-month target for South Korea's KOSPI index by 9%, citing a combination of elevated interest rates, firmer oil prices, and a stronger Korean won that are set to pressure corporate earnings. The revised forecast brings the index goal down to 8,000 points from the previous 8,800, with bull and bear case scenarios now positioned at 9,200 and 5,100, respectively.

In a report released Friday, analysts led by Yong-Suk Son noted that while the KOSPI still holds considerable upside potential, the index is likely to remain range-bound until the upcoming third and fourth-quarter earnings seasons provide a clearer picture of profit sustainability and shareholder return strategies. The market's liquidity has also softened, driven by subdued activity from both foreign and retail investors, while the adverse effects of the foreign exchange market remain only partially priced in, particularly given the won's significant appreciation.