South Korean shares ended at a two-year high on Wednesday, bolstered by rallying technology and banking stocks, with robust foreign buying driving shares in Samsung Electronics Co Ltd to a record close.
Renewed foreign buying, focused on IT firms and banks, helped the market overcome early losses from concerns that a hike in US interest rates was on the horizon, analysts said.
Samsung Electronics, the world's top maker of memory chips, settled at a record close of 625,000 won, up 1.63 percent, after touching a lifetime high of 627,000 won during the day.
The benchmark Korea Composite Stock Price Index (KOSPI) finished up 1.2 percent at 929.95, the highest close since April 18, 2002, when it ended at 937.61 points.
"Recent strong corporate earnings boosted foreign appetite for Korean stocks and more than compensated for the impact from losses on the US market," said Hyun Jung-hwan, an analyst at SK Securities.
"While the KOSPI stands at a two-year high, there appears to be some room for further gains. Major Korean firms have much stronger earnings now than they did when the market was hitting similar levels in the last couple of years."
Federal Reserve Chairman Alan Greenspan said on Tuesday the US economy seemed to have turned the corner and the threat of deflation was over, whipping up fears a rise in interest rates was on the horizon.
LG Electronics Inc rose nearly two percent to a record close and intraday level of 77,800 won as the firm announced its quarterly profits had trebled, beating analysts forecasts.
Hynix Semiconductor Inc added 3.13 percent to 13,200 won after the chief executive of its main creditor bank said the chipmaker, rescued by a huge bailout in 2002, was likely to survive thanks to an improving industry outlook.
Trade volume reached 554 million shares with a turnover of 3.27 trillion won, against 457 million shares worth 2.88 trillion won on Tuesday. Losers outnumbered gainers by 399 to 331 with 84 titles ending flat.
Foreign investors bought a net 325.4 billion won in shares and local institutional investors sold a net 234.9 billion won. Retail investors also sold a net 226.5 billion won worth of shares.
The June KOSPI 200 futures index rose 0.55 point to 121.85 and the underlying KOSPI 200 spot index climbed 1.33 points to 121.93.
The junior Kosdaq closed 0.82 percent higher at 468.81.