South Korean shares rose to a record close on Tuesday, as energy-cost sensitive stocks such as Korea Electric Power Corp gained on expectations lower oil prices will cut their operating costs.
But broader gains were capped as investors booked profits in blue chips ahead of the year-end and as foreign investors sold heavily for a third consecutive session.
The benchmark Korea Composite Stock Price Index rose 0.12 percent to a record close of 1,341.00 in choppy trade. Shares fell as low as 1,331.56 at one point.
"Concerns over higher oil prices and US interest rate hikes, which had been main obstacles for the market, are easing," said Joseph Han, an analyst at Daewoo Securities.
The main index has risen almost 50 percent this year, making it the best performer among major regional markets. State-run power provider KEPCO rose 1.73 percent to 38,200 won as investors cheered lower oil prices.
Transportation stocks rose, with top local carrier Korean Air Co advancing 1.71 percent to 29,800 won.
A recent strengthening in the South Korean won was also seen lowering the costs of importing oil.
Shipping firm Hyundai Merchant Marine Co Ltd jumped 8.96 percent to 15,200 won as investors saw the stock as undervalued.
Brokerages and non-life insurers rose as investors expected the sector to show improving earnings on possible deregulation measures from the government and healthy local stock markets.
Samsung Fire and Marine Insurance, South Korea's top non-life insurer, rose 4.76 percent to 132,000 won. Hyundai Securities Co Ltd gained 5.94 percent to 15,150 won
Foreign investors sold a net 115.1 billion won worth of local shares on Tuesday, bringing their net sales over the last three sessions to 569 billion won. Investors also locked in gains in recent outperformers amid caution about slowing trade ahead of the year-end.
LG Electronics Inc, the world's fourth-biggest mobile phone maker, fell 1.15 percent to 86,000 won after having gained nearly 7 percent on Monday.
Kookmin Bank fell 1.1 percent to 72,200 won. Shares in the country's biggest lender had surged 80 percent this year as of Monday's close.
Trade volume reached 522 million shares worth 4.2 trillion won compared to 514 million shares worth 4.2 trillion won on Monday. Decliners outnumbered gainers by 409 to 355, with 60 titles ending flat.
Institutional investors bought a net 85.3 billion won, while retail investors purchased a net 11.6 billion won.
The March KOSPI 200 futures index fell 0.30 point to 169.70, but the underlying KOSPI 200 spot index gained 0.14 point to 172.05. South Korea's junior and tech heavy Kosdaq market closed 0.64 percent lower at 718.74.
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