South Korean shares rose 1.2 percent on Tuesday, ending higher for the first time in five sessions, as investors snapped up stocks with good second-half earnings potential such as lenders and shipbuilders.
But a rise in oil prices to a record high hit power monopoly KEPCO, while some investors sold on concerns the Fed would signal more US interest rate hikes down the line at its policy-setting meeting later in the day.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 1.21 percent to end at 1,099.77, just below the psychologically important 1,100-point mark.
"Today's gains show that the recent bullish trend still has some life left in it," said Choo Hee-yeop, deputy general manager of asset management strategy at Korea Investment and Securities.
South Korea's main index, which hit its highest intraday level in more than a decade last week, had fallen 2.9 percent over the past four sessions.
Kookmin Bank rose 2.29 percent to 53,700 won amid growing expectations for strong second-half earnings after positive quarterly results in the sector.
Shipbuilder Samsung Heavy Industries Co rose 5.73 percent to 13,850 won, after earlier touching its highest intraday level in six years, amid hopes for improving earnings from a slate of orders for lucrative liquid natural gas carriers.
POSCO, the world's fifth-biggest steel maker, rose 1.41 percent to 215,500 won on hopes steel prices would rebound by the second half, helped by production cuts in the sector and better-than-expected global economic growth.
Hyundai Motor Co, South Korea's top auto maker, rose 1.25 percent to 73,000 won after Standard and Poor's on Monday placed its debt ratings on watch for a possible upgrade.
Hyundai Department Store Co Ltd advanced 6.85 percent to 59,300 won after it said late on Monday its quarterly net profit was stronger than expected.
Woori Investment and Securities Co, the top local brokerage in terms of market share, gained 6.13 percent to 11,250 after its net profit in July surged from a year earlier.
Trade volume reached 460 million shares worth 2.7 trillion won compared to 390.2 million shares worth 2.3 trillion won on Monday. Gainers outnumbered decliners by 553 to 193 with 65 titles ending flat.
Foreign investors sold a net 101.8 billion won in shares on the main bourse, data at 0645 GMT showed. Retail investors sold a net 7.4 billion won. Institutional investors bought a net 40 billion won.
The September KOSPI 200 futures index rose 2.15 points to 142.35 and the underlying KOSPI 200 spot index added 1.62 points to 142.11.
South Korea's junior and tech heavy Kosdaq market rose 1.61 percent to finish at 515.54, snapping a seven session losing streak.
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