South Korean stocks closed 0.42 percent higher Tuesday on the back of foreign buying amid the prolonged partial shutdown of the United States government, analysts said. The local currency fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) gained 8.34 points to finish at 2,002.75. Trading volume was moderate at 325.4 million shares worth 4.15 trillion won ($3.86 billion) with losers outpacing gainers 479 to 327.
Analysts said foreigners led the market gain by purchasing a net 78 billion won on the main bourse, extending their buying rally to the 29th trading session since Aug. 23.
It marked the longest buying rally since 34 days tallied in the first quarter of 1998.
Analysts, however, added the growth was limited due to the rising uncertainties over the political impasses in the U.S.
The U.S. federal government headed into its first shutdown in 17 years on Oct. 1, keeping only essential services intact, after Congress failed to pass a spending bill for the fiscal year of 2014 amid disputes over the new healthcare program, dubbed Obamacare.
"Investors, however, believe that the U.S. uncertainties will be settled eventually," said Ma Joo-ok, a researcher at Kiwoom Securities Co.
Retail investors also scooped up a net 26.2 billion won, while institutions sold a net 61.8 billion won during Tuesday's trading session.
Tech shares traded lower, with market behemoth Samsung Electronics falling 0.42 percent to 1,430,000 won and top chipmaker SK hynix decreasing 0.46 percent to 32,750 won. Local handset maker LG Electronics shed 1.46 percent to 67,300 won.
Brokerage houses also traded bearish, with Samsung Securities moving down 0.33 percent to 45,750 won and KDB Daewoo Securities losing 0.52 percent to 9,600 won. Woori Investment and Securities Co. closed flat at 10,900 won.
In contrast, carmakers closed higher, with No. 1 Hyundai Motor adding 2.42 percent to 253,500 won and its smaller affiliate Kia Motors moving up 1.43 percent to 64,000 won. Top auto parts maker Hyundai Mobis gained 0.72 percent to 281,000 won.
The local currency ended at 1,073.70 won against the greenback, down 2.20 won from Monday's close.
The South Korean financial markets will be closed on Wednesday for Hangeul Day, which commemorates the invention and proclamation of the Korean alphabet in 1446. (Yonhap News)
