The May figure also marked the largest monthly rise since the 7.1 percent expansion recorded in January 2012. Comparable on-month increases were 2.1 percent in April and 3.3 percent in March.

In tandem with the KOSPI's surge, the total capitalization of the main stock market rose 6.2 percent on-month to 1,519 trillion won ($1.35 trillion) as of Wednesday, marking the highest monthly gain in more than five years.

Analysts attributed South Korea's red-hot stock market to strong foreign buying of undervalued local shares, improving corporate earnings and the country's resilient exports.

In the first five months of the year, offshore investors bought a net 7.59 trillion won worth of stocks. As of end-May, foreigners held 557 trillion won worth of local shares, up 6.4 percent from the previous month.

Market watchers have offered mixed forecasts. Some predict the KOSPI to take a breather this month with investor attention shifting to the KOSDAQ market. Others say the main stock market will likely resume its upward momentum following a short period of correction.

Analysts warned the South Korean stock market is faced with such negatives as concerns over a possible impeachment of US President Donald Trump, China's financial instability and possible US rate hikes this month.

The Federal Reserve is scheduled to hold its policy meeting on June 14-15 amid expectations the US central bank will hike its benchmark lending rate for the second time this year. The Fed raised rates in March on economic optimism.

However, expected improvements in second-quarter earnings of top-cap Samsung Electronics Co. and other major companies are the most positive factor that may help the KOSPI keep its upward momentum.

Samsung saw its operating profit spike 48 percent on-year to nearly 10 trillion won in the January-March period on its robust chip business. The global tech giant is tipped to even chalk up an operating profit of up to 13 trillion won for the second quarter. (Yonhap)