South Korean stocks rallied for second straight session Thursday on the back of strong foreign buying. The Korean won rose against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) increased 45.55 points, or 1.57 percent, to close at 2,945.27 points.

Trading volume was moderate at about 523 million shares worth some 11.8 trillion won ($10 billion), with gainers outnumbering losers 756 to 139.

Foreigners bought a net 886 billion won, while retail investors sold 915 billion won and institutions offloaded 3 billion won.

Volatility was high in the early morning, tracking overnight losses on Wall Street that stemmed from worries about global outbreaks of the omicron variant of the coronavirus.

The Dow Jones Industrial Average retreated 1.34 percent, and the tech-heavy Nasdaq composite declined 1.83 percent, as the first case of the omicron variant in the United States worsened investor sentiment in the global financial markets.

The key stock index gained ground since the late morning, as foreign investors scooped up local stocks on anticipation of potential stock price hikes.

"Foreign investors have been purchasing semiconductor-related stocks since yesterday," Meritz Securities analyst Lee Jin-woo said.

Strong advances by chipmakers and automakers led the KOSPI's gain, while financial heavyweights retreated.

Market bellwether Samsung Electronics increased 1.88 percent to 75,800 won, and No. 2 chipmaker SK hynix jumped 3 percent to 120,000 won.

Leading carmaker Hyundai Motor climbed 2.24 percent to 205,500 won, and internet portal operator Naver moved up 2.18 percent to 398,500 won. Pharmaceutical giant Samsung Biologics edged up 0.11 percent to 892,000 won.

Among losers, electric car battery maker Samsung SDI lost 1.15 percent to 685,000 won, and bank top cap Kakao Bank decreased 0.31 percent to 65,000 won.

The local currency closed at 1,175.9 won against the US dollar, up 3.3 won from the previous session's close. (Yonhap)