Seoul shares rose 0.3 percent on Tuesday, as near-record high oil prices lifted oil refiners such as SK Corp, but broader gains were capped by a fall among exporters facing the threat of reduced global consumer demand.
Samsung Electronics Co Ltd, South Korea's biggest stock, rose 1.08 percent to 655,000 won, bolstered by its stock buyback plans and by optimism that second-half earnings would recover on improving seasonal demand.
Investors were also focused on earnings, with LG Chem Ltd gaining 1.47 percent to 44,900 won ahead of its quarterly results.
LG Chem, the country's biggest chemical maker, said after the market's close its quarterly profit fell 44 percent from a year ago due to high raw material costs driven by surging oil prices.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 0.31 percent to end at 1,427.00, after earlier gaining as much as 0.72 percent but falling as much as 0.53 percent.
Oil prices stood within touch of a record high on Tuesday, holding above $70 a barrel on growing fears of possible military action against Iran and a major disruption in Nigerian supplies.
US crude futures in Asia were trading at $70.68, after earlier climbing as much as $70.78, near a record $70.85 hit last August in the aftermath of Hurricane Katrina.
"Oil prices may not go down soon due to the issue of Iran and other international geopolitical issues. Domestic oil refiners could benefit a lot from this situation," said Kim Hyun-tae, a fund manager at Landmark Investment Management.
Oil refiners rose on hopes that product prices would gain as a result of higher oil prices, helping to improve margins.
SK Corp, the country's biggest refiner, shot up 2.74 percent to 71,300 won, after earlier hitting an all-time high of 72,600 won.
Third-ranked S-Oil Corp rose 1.65 percent to 74,000 won, after announcing on Monday its board had approved a 3.57 trillion won project to build a 480,000 barrel-per-day refinery, which would increase total capacity.
Investors also opted for domestically-focused stocks with earnings outlooks that are less affected by higher energy prices or a stronger local currency.
SK Telecom Co, the country's biggest mobile operator, rose 3.71 percent to 209,500 won as increased sales of data services such as music downloads and optimism about the domestic economy drove up expectations for solid earnings.
However, the rise in oil prices set off worries about the impact on exporters and threatens to dampen a rally that had sent the KOSPI to record highs in each of the past two sessions.
Exporters fell, with LG Electronics Inc, the world's fourth-biggest mobile phone maker, down 0.85 percent to 82,000 won, while LG.Philips LCD Co Ltd fell 1.09 percent to 40,700 won.
A stronger South Korean won also hurt exporters, after the dollar posted sharp losses on Monday on growing concerns that the cycle of rising US interest rates may be ending.
Although domestic exporters generally would benefit if the US central bank stops raising rates, the effects could be offset if a falling dollar bolsters the value of the won.
Firms heavily reliant on oil imports dropped, with state-run power provider Korea Electric Power Corp declining 1.63 percent to 42,300 won, while Korean Air lost 2.92 percent to 36,600 won.
Trade volume reached some 320 million shares worth 3.8 trillion won, data at 0705 GMT showed, compared to 336.6 million shares worth 3.4 trillion won on Monday.
Decliners outnumbered gainers by 426 to 327 with 70 titles ending flat.
Foreign investors sold a net 88.2 billion won in shares on the main bourse, while retail investors sold a net 134.7 billion won. Institutional investors bought a net 166.4 billion won.
The March KOSPI 200 futures index gained 0.80 point to 185.75, while the underlying KOSPI 200 spot index added 0.60 point to 184.90. South Korea's junior and tech-heavy Kosdaq market fell 0.02 percent to finish at 702.84.
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