South Korean shares ended at their highest in more than 11 weeks on Thursday, as exporters such as Samsung Electronics rallied on expectations US interest rates will remain on hold following tame inflation data.
A drop in oil prices to around eight-week lows further eased worries about inflation. Technology shares surged after Hewlett-Packard Co said on Wednesday quarterly profit beat forecasts and issued a forecast that topped analyst estimates, with chip makers surging after Credit Suisse upgraded its rating on the US sector to "overweight" from "market weight."
The benchmark Korea Composite Stock Price Index (KOSPI) rose 0.93 percent to end at 1,327.78, marking its highest close since May 29.
"After focusing on containing inflation, the Fed appears to be succeeding, so now their focus will switch to (US) economic growth. That's definitely positive for global markets," said Choo Hee-yeop, deputy general manager of asset management strategy at Korea Investment and Securities.
US stocks rallied on Wednesday, with the S&P 500 index reaching a three-month high, as data showing a moderate increase in the US consumer price index raised expectations the Federal Reserve will keep US interest rates on hold.
The KOSPI had dropped since mid-May on worries that the Fed would continue raising rates but has rebounded this month as investors anticipated an end to the US monetary tightening campaign.
However, although the index has now notched its third consecutive day of gains, analysts opted largely for caution, given uncertainties that include a slowing US economy and strong selling by foreign investors.
Overseas investors bought a net 32.4 billion won ($33.68 million) on Thursday, data at 0640 GMT showed, which would barely make a dent in the net $9.7 billion they have sold since May.
The KOSPI has now gained 2.3 percent so far this month, but is still down 3.7 percent for the year.
Exporters rose, with Kia Motors Corp gaining 2.04 percent to 15,000 won. South Korea's junior and tech heavy Kosdaq market rose 0.68 percent to finish at 551.81.
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