South Korean stocks advanced for the second straight day Tuesday to finish just short of the 3,100-point mark in tandem with global stock rallies and eased concerns over China's liquidity squeeze. The Korean won fell against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) rose 40.28 points, or 1.32 percent, to close at 3,096.81 points.

Trading volume was moderate at about 874 million shares worth around 18.9 trillion won ($16.9 billion), with gainers outnumbering losers 664 to 190.

Foreigners bought a net 195 billion won, while retail investors sold a net 190 billion won. Institutions offloaded a net 10 billion won.

The KOSPI gathered ground as overnight US stock rallies boosted investor sentiment in local financial markets.

"Investors' appetite for risky assets remained high as the world's central banks continued to signal that they would continue to support monetary easing policy," Kiwoom Securities analyst Seo Sang-young said.

"China's short-term money rates also steeply fell, boosting foreign buying in the local stock market," he said.

Most large caps added gains in Seoul, with tech heavyweights leading the KOSPI's hike.

Market kingpin Samsung Electronics rose 1.69 percent to 84,400 won, and No. 2 chipmaker SK hynix moved up 4 percent to 130,000 won.

Internet portal giant Naver jumped 4.17 percent to 362,500 won, and top messenger operator Kakao advanced 0.91 percent to 445,500 won.

Leading chemical maker LG Chem added 1.58 percent to 965,000 won, and rechargeable battery maker Samsung SDI climbed 0.94 percent to 752,000 won.

Top pharmaceutical firm Samsung Biologics gained 1.6 percent to 826,000 won, while Celltrion lost 4.18 percent to 355,500 won. Leading carmaker Hyundai Motor added 0.84 percent to 240,500 won.

The local currency was trading at 1,117.7 won to the US dollar, down 1.2 won from the previous session's close. 

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys lost 1.4 basis points to 0.980 percent, and the return on the benchmark five-year government bond fell 3.2 basis points to 1.314 percent. (Yonhap)