South Korea's business sentiment improved for October on expectations of a possible rebound in domestic consumption amid an accelerating nationwide vaccination drive, a local think tank said Wednesday.

The business survey index (BSI) of the country's top 600 companies by sales rose to 103.4 for next month, up from 100.6 for September, the Korea Economic Research Institute (KERI) said in a statement.

The business outlook stayed above 100 for a second straight month. The actual BSI stood at 98.9 in September, up from 97.7 a month earlier.

A reading above 100 means optimists outnumber pessimists, while a figure below the benchmark means the opposite.

"The government needs to expand vaccinations and strengthen quarantine measures to prop up business sentiment amid a spike in new coronavirus cases following the Chuseok holiday," KERI said.

KERI said 376 out of the 600 companies responded to the survey, which was taken from Sept. 13-17. (Yonhap)