Seoul shares rose for a 10th session in a row on Wednesday, posting their highest close in more than nine weeks, as exporters such as Hyundai Motor gained on easing worries over US interest rates and lower oil prices.
Internet stocks, such as NHN Corp, extended a recent rally on solid first-quarter earnings expectations and amid market speculation US Web search firm Google Inc was looking to make acquisitions in the region.
Foreign investors bought a net 325.6 billion won ($338.2 million) in shares on the main bourse, data at 0655 GMT showed, bringing their total net buying over the past four sessions to 1.2 trillion won.
But broader gains were capped as investors locked in gains as the KOSPI approached the record 11-session winning streak hit between May and June 1999.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 0.23 percent to 1,388.77, its highest close since ending at 1,399.83 on January 31.
"We are at a level where we should be cautious. Foreign investors have been buying so strongly that it has led the market higher. Whether they continue buying will determine where the market heads next," said Choo Hee-yeop, deputy general manager of asset management strategy at Korea Investment and Securities.
The heavy buying by foreign investors and eased worries over the US interest rate outlook led the South Korean won to its highest level in 8-1/2 years against the dollar, creating uncertainty about whether exporters would hold on to gains.
The KOSPI's relative strength index reached 80.1 on Wednesday, well above the 70-point threshold at which investors view a market as overbought, and marking its fourth-consecutive session above that level.
Flat panel maker LG.Philips LCD Co Ltd added 1.49 percent to 44,300 won, with Hyundai Motor Co, the country's biggest auto maker, rising 3.41 percent to 88,000 won.
Oil prices fell overnight on expectations for another rise in crude stocks. US crude futures fell 51 cents to $66.23 per barrel, with oil trading at $65.85 in Asia.
Shinhan Financial Group rose 2.83 percent to end at 45,450 won, down from a record 45,500 won earlier in the session, with investors optimistic about its expansion plans. The chief executive of Shinhan's banking unit said it was looking at acquisitions abroad, with the financial service provider also expected to bid for card issuer LG Card Co Ltd.
POSCO Co Ltd, the world's fifth-biggest steel maker, fell 2.21 percent to 243,500 won after shipbuilder Hyundai Heavy Industries Co Ltd said it had negotiated a 15 percent cut in steel plate prices from three Japanese firms.
Trade volume reached 385.1 million shares worth 3.9 trillion won compared to 392 million shares worth 4.4 trillion won on Tuesday. Gainers edged out decliners by 449 to 332 with 76 titles ending flat.
Retail investors sold a net 168 billion won, while institutional investors sold a net 134.6 billion won.
The June KOSPI 200 futures index rose 1.20 points to 181.35, while the underlying KOSPI 200 spot index added 0.20 point to 179.97.
South Korea's junior and tech heavy Kosdaq market rose 1.18 percent to finish at 688.38, marking its sixth consecutive session of gains and its highest close since ending at 690.24 on January 31.
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