South Korea's National Pension Service (NPS) has become a major driver of the local equity market this year as it launched stock investments at the highest level ever, bourse data showed Thursday.

The government-owned pension fund has bought a net 2.5 trillion won ($2.2 billion) in the main KOSPI market this year as of Tuesday, mostly picking up battered blue-chip stocks, the Korea Exchange (KRX) said.

Samsung Electronics Co., the nation's biggest firm by market value, and top automaker Hyundai Motor Co., were its top picks, the data showed.

In the same period, foreigners and other institutions purchased 1.9 trillion won and 1.5 trillion won each, while individuals sold more local shares than they bought at 1.5 trillion won, it said.

The nation's biggest institutional investor, among the world's top four pension funds, has been gradually reducing its exposure to bonds and real estate investments and allocating more funds to riskier assets to reap higher returns amid record-low interest rates and growing budget strains.

The NPS earmarked 4.95 trillion won for investment in Korean stocks this year, up from 3.8 trillion won last year.

Market watchers say the NPS's investment in market heavyweights was behind the recent rally in the benchmark KOSPI, which had been outshined by smaller shares in the tech-laden KOSDAQ.

"It seems that the NPS, which sticks to a mid- and long-term investment strategy, considered the KOSPI as undervalued because it had remained below 2,000 points earlier this year," Im No-jung, an analyst at I'M Investment & Securities, said. 

"The NPS usually increases stock purchases at the beginning and end of the year. Their strong buying this year shows that they believed local stocks were low-priced," said Lee Kyung-min, a researcher at Daishin Securities.

The biggest beneficiary was Samsung Electronics, whose share price bounced back to its record mark of 1.5 million won on Tuesday for the first time since Nov. 1, 2013, on upbeat prospects from its latest flagship smartphone, the Galaxy S6.

The world's largest handset maker received 817.7 billion won from the NPS fund to raise its ratio in the KOSPI to this year's high of 18.13 percent, or 221.3 trillion won in market capitalization, according to market research firm FnGuide. (Yonhap)