South Korean stocks jumped to a three-week high on Wednesday as investor sentiment was cheered by the U.S. Fed's dovish movement and eased uncertainty about corporate earnings, analysts said. The Korean won gained ground against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) gained 35.49 points, or 1.84 percent, to 1,961.17, marking the highest level in three weeks since it hit 1,962.25 on Oct. 8. Trading volume was moderate at 388.9 million shares worth 5.36 trillion won (US$5.1 billion), with winners far outpacing decliners 520 to 315.

"Simply, the global market was on a roll last night, and South Korea followed suit," said Bae Sung-young, a senior analyst from Hyundai Securities Co. "The Fed meeting will put an end to quantitative easing, but the U.S. policymakers will unlikely be in a hurry to raise the key rate."

Investors increased their holdings of local shares as most major companies wrapped up their quarterly earnings reports, he noted.

The KOSPI has lost momentum due to earnings uncertainty. Now investors know the figures and can bet their money," said Bae.

Foreigners turned net buyers in two sessions, purchasing a net 112.2 billion won worth of local shares, with institutional investors buying a net 288.1 billion won.

Tech firms led the rally, with Samsung Electronics, South Korea's biggest company in terms of market cap, jumping 3.57 percent to 1,130,000 won, and LG Electronics, the No. 2 smartphone maker here, gaining 4.31 percent to 67,800 won as its third-quarter earnings beat market expectations.

Samsung Heavy Industries, the shipbuilding unit of Samsung Group, surged 7.07 percent to 25,750 won after it announced a stock buyback worth 289 billion won. The company shareholders on Monday approved a merger with Samsung Engineering, the group's industrial plant builder. The latter soared 5.71 percent to close at 61,100 won.

Bank shares were among the biggest winners, with Shinhan Financial Group leaping 7.87 percent to 51,400 won and Hana Financial Group advancing 4.45 percent to 37,550 won.

NHN Entertainment, the online game affiliate of leading Internet portal operator Naver, rose 4.78 percent to 76,700 won after releasing a series of highly anticipated mobile games. Naver slumped 3.23 percent to 778,000 won.

The local currency closed at a one-month high of 1,047.3 won against the U.S. dollar, up 2.4 won from Tuesday's close amid speculation that the Fed will maintain its near zero-rate policy for a considerable time.

Bond prices, which move inversely to yields, ended higher. The yield on three-year Treasurys fell 1.0 basis point to 2.207 percent, and the return on the benchmark five-year government bonds slid 1.5 basis points to 2.367 percent. (Yonhap)