South Korean stocks gained 0.3 percent on Wednesday, rising for a third consecutive day ahead of the ex-dividend date, with steel and other metal stocks enjoying a rally on hopes for growth in the United States and China. The local currency rose against the greenback.

The benchmark Korea Composite Stock Price Index added .66 points to end at 1,999.22. Trade volume was thin at 473.63 million shares worth 3.73 trillion won ($3.17 billion), with winners beating losers 417 to 384.

Investors digested a batch of economic data from abroad such as U.S. posting robust consumer spending in November, while Chinese leaders hinted at more stimulus measures to jack up growth in the world's second-largest economy.

Institutions scooped up a net 439.57 billion won worth of local stocks ahead of the ex-dividend date, while foreigners extended their selling streak for a 16th straight session to offload a net .7 billion won.

"Institutions and pension funds have injected funds into equities for dividends, and their buying mode is expected to continue until the ex-dividend date like in the past," Ryo Yong-seok, an analyst at Hyundai Securities, said.

"The amount of foreign sell-off has decreased following the U.S. interest rate hike, but the rout in oil prices remains a burden on the market to limit further rise."

Steelmakers rallied on growing confidence in the U.S. and Chinese economies, with industry leader POSCO increasing 3.47 percent to 179,000 won, and Hyundai Steel jumping 5.89 percent to 3,900 won.

Petrochemicals traded bullish as Dubai crude oil prices slightly recovered from an 11-year low on Tuesday.

Top refiner SK Innovation went up 1.12 percent to 136,000 won, and Kumho Petrochemical gained 2.24 percent to 54,700 won.

In contrast, auto shares retreated on the strengthening local currency against the greenback, which could hurt their price competitiveness in the global market.

Leading automaker Hyundai Motor slipped 0.98 percent to 151,500 won, and its sister company Kia Motors fell 1.1 percent to 54,000 won. 

The local currency ended at 1,173.1 won against the greenback, up 0.2 won from Tuesday's close, rising for a third consecutive day. (Yonhap)