South Korea’s benchmark Kospi could log a fresh record high in the second quarter, a local analyst suggested Tuesday, citing stable US Treasury yields and market rallies on Wall Street as fundamentals.

KB Securities analyst Lee Eun-taek wrote in a report that the rise in value of the Korean won against the US dollar is also another positive factor to foreigners’ net purchases in the local stock market.

“Kospi is expected to continue its upward movement in the middle of the second quarter. The main bourse may look to touch an all-time high of 3,209 points,” the report read, adding that the index has slowly been moving up, rising 5.5 percent from a yearly low of 2,958 points marked on March 10.

Kospi hit a record closing high of 3,208.99 points on Jan. 25. It fluctuated around the 3,100-point level during the Tuesday trading session and ended the day at 3,127.08 points, up 0.2 percent from the previous session’s close.

Despite surprising results in the jobs report and the Institute of Supply Management’s services employment index, the US Treasury yields have been stabilized over comments from Federal Reserve Bank of Cleveland President Loretta Mester and the US Fed Chair Janet Yellen.

The yield on the US 10-year Treasury note has maintained 1.7 percent. The five-year yield also fell to 0.93 percent from the previous 0.99 percent after the announcements.

But Lee, at the same, forecast that the main bourse’s rosy outlook may continue only until the middle of this quarter. The index movement will highly depend on austerity policies, he noted.

The International Monetary Fund warned last night that a potential surprise tightening by the US Fed could trigger capital outflows from emerging markets, he added.

By Jie Ye-eun (yeeun@heraldcorp.com)