South Korean stocks closed sharply higher Tuesday, extending earlier gains on hope for massive economic stimulus measures in major economies, such as China and the United States, to minimize the fallout from the new coronavirus outbreak. The local currency rose against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) surged 37.52 points, or 2.19 percent, to close at 1,754.64. Trading volume was high at slightly over 1 billion shares worth 13.6 trillion won ($11.2 billion), with gainers far outnumbering losers 782 to 108.

The index opened sharply higher, tracking overnight gains on Wall Street.

“The New York stock market closed higher on the news that the US government will come up with additional stimulus measures and efforts to develop a vaccine," said Kim Hoon-gil, an analyst at Hana Financial Investment.

"However, investors are expected to remain cautious for some time as uncertainties still remain high."

Investor sentiments were further boosted by hopes that China may soon take massive stimulus measures.

"To market investors, the key factor will certainly be the size of (China's) stimulus package," said Park Seok-jung, an analyst at Shinhan Financial Investment, noting China may be moving to hold its annual political meetings in mid-April.

"At the meetings, China is expected to declare termination of its COVID-19 outbreak, pledge its implementation of a massive economic stimulus package and highlight its role in ending the spread of the disease and boosting the global economy," Park added.

Foreign investors continued to offload local shares, dumping a net 73 billion to extend their latest selling streak to a 19th consecutive session. Institutions sold a net 291 billion won, while retail investors scooped up a net 387 billion won.

Most large caps closed in positive terrain.

Market kingpin Samsung Electronics shed 0.21 percent to 47,750 won, but top pharmaceutical firm Samsung BioLogics surged 7.11 percent to 482,000 won, with Celltrion spiking 23.78 percent to 229,000 won.

Leading automaker Hyundai Motor added 3.86 percent to 88,700 won, while its smaller affiliate Kia Motors soared 4.21 percent to 26,000 won.

The Korean won closed at 1,217.40 won per dollar, up 7 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys fell 2.8 basis points to 1.070 percent, and the return on the benchmark five-year government bond lost 2 basis points to 1.296 percent. (Yonhap)