Korean stocks climbed 0.79 percent on Tuesday on signs of a U.S. economic recovery and eased eurozone woes, analysts said. The local currency rose against the U.S. currency.
The benchmark Korea Composite Stock Price Index (KOSPI) gained 15.24 points to 1,955.79. Trading volume was heavy at 462.4 million shares worth 6.6 trillion won ($5.9 billion) with gainers outnumbering losers 524 to 306.
"U.S consumer spending was flat in December despite a year-end boost. But still investors are optimistic about improving employment data due out later this week," said Um Tae-woong, an analyst at Bookook Securities Co.
Investor sentiment was also lifted by European leaders' decision to take tighter budget discipline and a successful Italian bond auction, he said.
But the gain was limited amid the absence of no big momentum to push up the key index further. South Korea's industrial output shrank for a third month in December.
"Investors stayed on the sidelines as signs of economic recovery are not very clear and the European debt problems still remain," said Um.
Offshore investors turned to net buyers to snap up a net 134 billion won worth of shares, while institutions sold a net 33.2 billion won.
Shipbuilders led the increase, with the world's biggest shipyard Hyundai Heavy Industries jumping 4.01 percent to 311,500 won and Daewoo Shipbuilding & Marine Engineering hiking 6.50 percent to 27,850 won after clinching a US$560 million deal from Kuwait.
State-run Korea Electric Power Corp (KEPCO) rose 2.39 percent to 27,900 won after the utility firm said it won an $800 million power plant order in Jordan.
Tech shares closed mixed. World's largest memory chipmaker Samsung Electronics slipped 0.72 percent to 1,107,000 won, while its smaller rival Hynix Semiconductor gained 2.29 percent to 26,850 won.
Financials finished lower with Hana Financial Group falling 2.78 percent to 38,400 won and Shinhan Financial Group dipping 1.32 percent to 44,750 won.
The local currency closed at 1,123.3 won to the greenback, up 4 won from Monday's close, thanks to the KOSPI's rise and recovering appetite for riskier assets, dealers said.
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasuries rose 0.02 percentage point to 3.38 percent and the return on benchmark five-year government bonds also edged up 0.10 percentage point to 3.49 percent.
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasuries rose 0.02 percentage point to 3.38 percent and the return on benchmark five-year government bonds also edged up 0.10 percentage point to 3.49 percent.(Yonhap)