Korean stocks closed 0.75 percent higher on Tuesday as investors picked up auto, pharmaceutical and other recently beaten-down shares, analysts said. The local currency dropped against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) gained 14.69 points to end at 1,982.5. Trade volume totaled 364.98 million shares worth 4.77 trillion won ($4.1 billion), with gainers outpacing decliners 576 to 217. 

The local stock market got off to a subdued start apparently taking a cue from mixed overnight closings on Wall Street and stayed range-bound throughout the day, in part affected by fluctuations in the Chinese market.

"It seems that the market was propped up by investors actively seeking to buy shares which had fallen much recently as they eyed their price merits," said Lee Kyung-min, an analyst at Daishin Securities. "As Chinese stocks showed signs of stability later in the day, the market here gained more upward momentum."

Auto issues rebounded from the previous day's retreat. Industry leader Hyundai Motor jumped 2.95 percent to 139,500 won, while its smaller affiliate Kia Motors gained 2.92 percent to 47,550 won.

Adding to the upward move were pharmaceutical firms which had been sidelined from recent market rallies. No. 1 drugmaker Hanmi Pharm advanced 3.31 percent to 593,500 won and smaller Yungjin Pharm surged 18.65 percent to 9,860 won.

Refinery companies also rallied, with SK Innovation ending up 3.41 percent at 151,500 won. Chemical maker LG Chem rose 1.44 percent to 282,200 won, which marked its first uptick in seven trading days.

Leading tobacco manufacturer KT&G, however, fell 2.27 percent to 129,000 won following a set of anti-smoking measures unveiled by the government that include tightening regulations on ads and other cigarette-related products.

Hyundai Merchant Marine, an embattled shipping firm, also plunged 7.55 percent to 12,850 won, the second straight day of setbacks since its trading resumed after a capital reduction aimed at improving its financial health.

Korea's won closed at 1,172.6 won against the greenback, down 6.8 won from the previous session. (Yonhap)