South Korean stocks closed 3.23 percent higher Wednesday as investor sentiment was bolstered by a foreign buying spree and the local currency's strength to the dollar in the aftermath of the overnight Wall Street rally.
The benchmark Korea Composite Stock Price Index (KOSPI) advanced 35.31 points to 1,127.51. Volume was moderate at 566.7 million shares worth 5.56 trillion won ($3.77 billion), with gainers outpacing losers 653 to 174.
"Sizable foreign buying and the won's strength lifted investor sentiment," Lee Sun-yup, an analyst at Goodmorning Shinhan Securities, was quoted as saying by Yonhap News Agency. "But it remains to be seen whether the Seoul bourse will continue its upswing due to lingering uncertainty about the depth of bad assets in the U.S. banking system."
U.S. stocks rallied Tuesday as a better earnings outlook for beleaguered Citigroup raised hopes for a recovery of the banking sector. The Dow Jones industrial average jumped 5.8 percent and the tech-heavy Nasdaq soared 7.07 percent.
Foreigners were net buyers of Seoul stocks for the second straight session, snapping up a net 541 billion won worth of local stocks on the main bourse.
Most shares traded in positive territory, led by financial and tech shares.
KB Financial Group, the holding company of top lender Kookmin Bank, jumped 7.33 percent to 32,200 won and its rival Shinhan Financial Group gained 2.19 percent to 23,300 won.
Market leader Samsung Electronics rose 4.17 percent to 525,000 won and chip giant Hynix Semiconductor advanced 0.98 percent to 8,210 won.
Power monopoly Korea Electric Power soared 8.02 percent to 26,950 won and top steel maker POSCO gained 4.33 percent to 349,000 won.
The Korean currency ended at 1,471 won to the greenback, up 40.5 won from Tuesday's close, as foreign investors increased their holdings of local stocks. The Korean unit rose as high as 1,465 won at one point in morning trading, and has gained 6.59 percent against the dollar for the past four sessions.