Seoul shares rose on Thursday, led by gains in technology stocks after Samsung Electronics Co Ltd gave an optimistic outlook for 2006 and as renewed foreign buying shored up confidence in local markets.
Department store operators such as Shinsegae also increased on data showing South Korean consumption accelerated in the third quarter.
But broader gains were capped as investors locked in gains after local shares climbed nearly 6 percent in the past three sessions, analysts said.
KT Corp, South Korea's top fixed-line and broadband operator, reversed earlier gains to end down 0.12 percent to 43,000 won, as the company lowered its full-year operating profit target for the second time this year, despite better-than-expected third quarter earnings.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 0.79 percent to end at 1,217.97. The index gained for the fourth consecutive session.
Foreign investors, who were net sellers for most of October, bought a net 118.3 billion won ($113.6 million) on the main bourse.
"Foreign investors have started buying again," said Lee Woo-hyun, an analyst at Kyobo Securities. "If this continues, hitting a new record before the end of the year is definitely possible."
Overseas participants have been largely absent from a rally earlier this year that had peaked with the main index hitting an all-time high of 1,246.41 on October 5.
Samsung Electronics climbed 2.09 percent to close at 587,000 won as an optimistic outlook helped investors regain appetite for the stock.
The world's top memory chip maker forecast on Thursday prices of its core computer memory chips would stabilise in the second half of 2006 and lower flash chip prices boost demand.
Chief executive Yun Jong-yong also told Reuters on the sidelines of a meeting with analysts he expected 2006 net profit to top this year's earnings.
Other technology shares were also higher, with Hynix Semiconductor Inc rising 1.78 percent to 20,000 won and LG.Philips LCd gaining 2.4 percent to 40,600 won.
Gains were helped by lower oil prices, with US crude futures settling 10 cents lower at $59.75 on Wednesday after hitting its lowest in three months during New York trading overnight. Oil was trading at $59.84 in Asia.
Among decliners, Samsung Securities Co fell 0.8 percent to 43,450 won. After the market close, the country's most valuable brokerage reported a nearly 14-fold jump in its quarterly profit.
Regulator data on Thursday showed pre-tax profits at South Korean brokerages nearly trebled in the six months to September, as stock trading volumes surged and sales of financial products increased commissions.
Shinsegae rose 1.79 percent to 399,000 won while Hyundai Department Store jumped 3.57 percent to 75,400 won.
Trade volume reached 374 million shares worth 3.3 trillion won compared to Wednesday's 326 million shares worth 3.3 trillion won. Gainers outnumbered decliners 403 to 340 with 82 titles ending flat.
Retail investors sold a net of 259.1 billion won while institutional investors bought a net of 144.6 billion won.
The December KOSPI 200 futures index rose 1.15 points to 157.25 and the underlying KOSPI 200 spot index climbed 1.29 points to 156.89.
South Korea's junior and tech heavy Kosdaq market added 0.59 percent to finish at 610.37.