Seoul: South Korea's key stock index reached a historic landmark Tuesday, surpassing the 4,500 mark for the first time in history, while another milestone may be in the offing on the back of corporate earnings momentum and policy backup, analysts said. The benchmark Korea Composite Stock Price Index (KOSPI) shot up 67.96 points, or 1.52 percent, to a record high of 4,525.48.

According to Yonhap News Agency, this significant rise comes a day after the KOSPI broke the 4,400 level, following a 76 percent gain last year. The KOSPI has climbed almost 6 percent in the first two sessions of the new year, continuously setting new records. Han Ji-young, an analyst from Kiwoom Securities, highlighted that the rally was primarily driven by sharp gains in major chipmakers such as Samsung Electronics and SK hynix, alongside leading automakers and brokerages.

Samsung Electronics reached a record high of 138,900 won (US$96), while SK hynix closed at 726,000 won, both surpassing previous records. Samsung had already advanced 7.5 percent in the year's first two sessions, and SK hynix rose 2.96 percent. Last year, the two chip giants experienced substantial growth due to an artificial intelligence (AI)-led chip boom.

Some experts predict that the KOSPI might climb as high as 5,000 or beyond this year, fueled by sustained foreign investor demand and upward earnings momentum. Local brokerages have also adjusted their KOSPI forecasts. Yuanta Securities raised its target to a range of 4,200-5,200, while Kiwoom Securities set its forecast up to 5,200 points.

Analysts believe that increased corporate earnings and supportive policy measures will further boost the market. Global investment banks project that the combined annual operating profit of the two major chipmakers could exceed 300 trillion won this year. Han from Kiwoom Securities suggested that the semiconductor sector may lead to an unprecedented earnings rally in the South Korean stock market.

However, concerns about market volatility remain amid uncertainties surrounding the Federal Reserve's policy direction. Kim Young-gu, an analyst from Yuanta Securities, warned that the upcoming U.S. midterm elections and geopolitical uncertainties, especially regarding the recent U.S. capture of Venezuelan President Nicolas Maduro, could pose risks. He noted that President Donald Trump's initiative to return to the Monroe Doctrine might exacerbate geopolitical tensions, and the momentum from the 'Trump Trade' could diminish if Republicans face significant losses in the November elections.