South Korean stocks surged nearly 2 percent Wednesday as investors snapped up financials and other large caps on weaker oil prices and overnight U.S. rallies.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 30.53 points, or 1.96 percent, to end at 1,591.76. Volume was moderate at 345.07 million shares worth 5.4 trillion won ($5.3 billion), with gainers outpacing losers 606 to 206.
"The market started on a positive note as oil price drops and rallies in U.S. stocks eased concerns over economic instability, with financial companies driving the advance overall throughout the day," Yonhap News quoted Lee Sun-yup, an analyst at Goodmorning Shinhan Securities, as saying.
Foreigners, however, remained a drag on the market, selling more than they bought for the 33rd consecutive day. Their net selling reached 247.48 billion won Wednesday.
Major financial shares posted sharp gains. Top lender Kookmin Bank rose 2.78 percent to 59,100 won and the nation's largest brokerage Samsung Securities jumped 2.44 percent to 67,100 won. Insurance companies also gained ground following their recent pullbacks. Samsung Fire & Marine Insurance closed up 3.76 percent at 193,000 won.
Airline and machinery shares ended higher. No. 1 flag carrier Korean Air jumped 5.17 percent to 47,800 won while the nation's largest power equipment maker Doosan Heavy Industries & Construction rose 4.95 percent to 97,600 won.
On Tuesday, U.S. crude fell $3.09 to $127.95 per barrel, sending Wall street stocks higher. The Dow Jones industrial average rose 1.18 percent and the tech-heavy Nasdaq composite index added 1.07 percent.
The Korean currency closed at 1,013.8 won against the dollar, up 3.8 won from Tuesday's close, on concerns that the government might intervene in the market to shore up the won.