President Lee Jae-myung (이재명) has put more weight on a normalisation process than short-term volatility in response to recent sharp moves in the domestic stock market. Market conditions are not good, with the KOSPI falling below the 8,000 level, but it is still sharply higher than before he took office and the domestic stock market remains undervalued, he assessed.

Lee said at a news conference marking his first year in office on June 8, "Stock prices rose faster than I thought, but I still think they are slightly undervalued."

Referring to the KOSPI falling below the 8,000 level, he said, "I see the KOSPI 8,000 has been broken," adding, "You could say a massive crash has come, but compared with 2,700 before I took office it has risen enormously."

Lee described recent market volatility as a natural price adjustment process. "The stock market is bound to have oscillations," he said. "It cannot keep rising every day, and it cannot keep falling every day either."

He added, "The situation changes constantly in the process of finding an appropriate price equilibrium point."

Lee also mentioned his presidential election pledge to achieve a KOSPI of 5,000. "I expected and was confident it would be achieved after about 2 to 3 years, but it happened in 6 months," he said, attributing the rise to what he called "trust."

He interpreted the rise in the domestic stock market as a normalisation process of abnormal conditions rather than the creation of a new environment. "The moment you become certain it is being normalised, there is no reason to wait 2 to 3 years," Lee said.

"Like a spring, our stock market had been pressed down excessively and was strangely too low," he said. "Even at best, it was valued at only about 60 percent."

Lee said he believed the domestic market could surpass a KOSPI of 5,000 through normalisation measures alone even excluding a semiconductor boom. "Excluding the special semiconductor situation, I thought we could surpass a KOSPI of 5,000 through normalisation measures alone in the current state," he said.

As measures to restore trust in the stock market, he cited easing geopolitical instability on the Korean Peninsula, clearly presenting national industrial and economic policy, a predictable market environment and eradicating stock price manipulation.

Lee said, "I could not bring myself to say it could be 6,000 to 7,000 even if we just fix these abnormal things, so I timidly said it would be 5,000," adding, "On top of that, a semiconductor boom emerged, and as I thought, that share is becoming 2,000 to 3,000 points."

He also mentioned the impact of a sharp stock rise on the foreign exchange market. "Stock prices have risen too much and are having a strange effect on the foreign exchange market," he said. "Rising stock prices became a reason the exchange rate in the foreign exchange market rose."

Lee added on the market's trajectory, "Stock prices are something that sway, and no country goes in a straight line; they necessarily move forward while shaking." "There is also a saying that stock prices climb a wall of worry and collapse on certainty," he said.