Seoul shares brushed a record high on Wednesday, led by a surging Korea Exchange Bank after the chief executive of a bigger rival expressed interest in bidding for the country's fifth-ranked lender.
Samsung Electronics rose 1.45 percent to 630,000 won, just off a record close of 637,000 won. Samsung said after the market closed, it was in talks with Apple Computer on a long-term contract to supply NAND-flash chips.
Exporters such as Kia Motors Corp were lifted by positive US data and as falling oil prices helped ease worries about the impact of higher energy costs on profits.
The benchmark Korea Composite Stock Price Index rose 1.06 percent to end at 1,267.16, just off a record high 1,267.20 hit in late afternoon trade.
Korea Exchange Bank (KEB) rose 5.2 percent to end at 13,150 won. It earlier rose by as much as 8 percent to its highest in over six years after the chief executive of Kookmin Bank said it was interested in biding for KEB.
Shares in top local lender Kookmin rose 0.3 percent to 66,800 won, with investors cautious the current value of KEB stocks would make a potential deal very expensive.
Hana Bank, which last week expressed interest in KEB, rose 2.91 percent to 42,400 won, with some investors hopeful it would be unable to compete against Kookmin in the bidding.
"There had always been concern about whether Hana would have the money to pay for KEB, but for Kookmin, a deal is quite possible," said Kim Hyun-tae, a fund manager at Landmark Investment Management.
"The problem is still that KEB is very expensive," he added.
Hynix Semiconductor Inc rose 1.25 percent to 24,500 won after the local exchange asked it and Samsung to clarify a report in the Maeil Business Newspaper they would supply Apple with flash-memory chips.
The world's second-biggest maker of memory chips said separately after the market's close it was also in talks with Apple but did not provide details.
Other exporters gained after US data on Tuesday showed an unexpected drop in October US core producer prices, while a separate report showed better-than-expected retail sales.
Auto maker Kia Motors rose 7.27 percent to 23,600 won after touching its highest since June 1998, with investors optimistic falling raw material prices and a domestic consumption recovery would further boost earnings.
Exporters were also lifted after US crude futures fell 71 cents to settle at $56.98 a barrel, their lowest settlement since July 20. Oil was trading at $57.00 in Asia.
Brokerages surged amid expectations a jump in earnings seen in the latest quarter would continue into the current three-month period.
Daishin Securities Co rose 4.35 percent to 18,000 won after it said on Tuesday its net profit in October surged to 22.1 billion won ($21.36 million) from 1.5 billion won a year earlier.
South Korea's junior Kosdaq market rose for a 13th consecutive session, ending up 0.66 percent at 648.13, its highest since ending at 657.4 on July 15, 2002.
Trade volume reached 545 million shares worth 4.2 trillion won compared to 434 million shares worth 3.5 trillion won on Tuesday. Gainers edged out decliners by 436 to 309 with 81 titles ending flat.
Foreign investors sold a net 140.2 billion won in shares on the main bourse, while retail investors sold a net 72.1 billion won. But institutional investors bought a net 171.6 billion won.
The December KOSPI 200 futures index rose 1.90 points to 163.40, while the underlying KOSPI 200 spot index added 1.75 points to 163.24.
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