South Korean stocks closed higher Tuesday as institutional investors scooped up shipbuilding and brokerage shares, analysts said.

The main market index KOSPI rose 13.32 points, or 0.78 percent, to 1,729.88. Volume was 416.3 million shares worth 5.77 trillion won ($6.21 billion), with winners outpacing losers 410 to 345.

"Investors snapped up shipbuilding stocks which underwent a correction in recent sessions," said Park Suk-hyun, an analyst at Kyobo Securities.

The key index moved into negative territory at one point in late trading after China announced its consumer prices in May grew a stronger-than-expected 3.4 percent, adding to concerns over a possible rate hike. But the index gained ground since tech shares like market heavyweight Samsung Electronics turned positive, according to analysts.