Seoul stocks rose 1.2 percent on Tuesday to their best finish in over a decade, as lower oil prices lifted auto makers, while department store operators brushed record highs on hopes for a pickup in consumer demand.
Chip-makers such as Samsung Electronics also gained after US tech bellwether International Business Machines Corp reported better-than-expected earnings on Monday.
But LG.Philips LCD Co Ltd fell 3.01 percent to 45,150 won, hit by gloomy results at both its major stakeholders and amid concerns about a possible share overhang. LG.Philips would price a $2 billion share sale on Thursday, one of the underwriters of the sale told Reuters on Tuesday.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 1.23 percent to end at 1,075.48, its highest close since ending at 1,081.26 on November 29, 1994.
Shares focused on domestic demand flourished, boosted by expectations private spending will show a marked improvement in the second half of the year.
Hyundai Department Store Co rose 3.98 percent to close at a session- and record-high of 54,800 won. Shinsegae Co rose 4.2 percent to 359,500 won, just off a record 361,000 won notched earlier in the session.
"Bullish sentiment about a second-half recovery in consumer demand is still intact and it's driving these stocks up," said KB's Kim.
Data on Friday showed sales at South Korea's top three department stores, including unlisted Lotte Shopping Co, rose for a fifth consecutive month in June, although at a slower pace.
Auto-makers also gained after US crude futures fell 77 cents to settle at $57.32 a barrel on Monday. Oil was trading at $57.07 in Asia.
South Korea is particularly sensitive to crude oil prices because it must import all of its crude needs.
Top local carmaker Hyundai Motor Co rose 3.39 percent to a record-high close of 67,100 won, while affiliate Kia Motors gained 3.13 percent to 14,850 won.
Samsung Electronics Co Ltd, the world's largest memory chip maker, rose 2.19 percent to end at 561,000 won, its highest close since ending at 576,000 won on April 29, 2004. Hynix Semiconductor Inc rose 1.86 percent to 21,950 won.
But investors' appetite for tech stocks was subdued after LG Electronics, the world's fourth-biggest handset maker, warned on Monday that business conditions would be difficult amid cut-throat competition in mobile phones and display products.
LG Electronics Inc, which also reported on Monday a larger-than-expected slump in quarterly profit and warned of a tough second-half outlook, fell 1.62 percent to close at 66,800 won.
The junior Kosdaq market extended a winning streak to a fourth session, rising 0.65 percent to 530.63.
Trade volume reached around 544.2 million shares worth 3.5 trillion won compared to 500.6 million shares worth 3.7 trillion won on Monday. Gainers outnumbered decliners by 445 to 281 with 73 titles ending flat.
Foreign investors sold a net 30.3 billion won in shares on the main bourse, data at 0642 GMT showed. Retail investors sold a net 14.1 billion won. Institutional investors bought a net 55.1 billion won. The September KOSPI 200 futures index rose 2.30 points to 139.30 and the underlying KOSPI 200 spot index gained 1.88 points to 138.66.
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