South Korean stocks closed higher Tuesday as investors scooped up undervalued shares after US stock indexes closed at an all-time high overnight. The Korean won rose against the US dollar.

The benchmark Korea Composite Stock Price Index added 14.26 points, or 0.58 percent, to 2,464.35.

Trading volume was moderate at 461 million shares worth 7.87 trillion won ($5.89 billion), with gainers outpacing losers 482 to 379.

Foreigners bought shares worth 137.9 billion won, while retail investors offloaded a net 358.3 billion won. Institutions scooped up a net 205.8 billion won.

Analysts said investors' sentiment was boosted as US shares reached an all-time high overnight.

The Dow Jones Industrial Average closed 0.36 percent higher to set a record. The S&P 500 advanced 0.22 percent, also reaching a fresh high. The tech-heavy Nasdaq added 0.32 percent as well.

"There could be some rebounds for shares that have recently experienced an excessive setback," said Han Ji-young, an analyst from Kiwoom Securities.

Finance shares led the overall gains, with KB Financial rising 4.26 percent to 51,400 won and Shinhan Financial advancing 4.98 percent to 39,000 won. KakaoBank gained 5.21 percent to 29,300 won.

Leading cosmetics firm AmorePacific jumped 5.23 percent to 138,900 won, and LG Chem gained 1.03 percent to 391,000 won.

Tech shares closed mixed, with Samsung Electronics rising 0.13 percent to 75,200 won and No. 2 chipmaker SK hynix losing 1.26 percent to 140,800 won.

Battery makers gained ground, with LG Energy Solution rising 0.4 percent to 373,500 won and Samsung SDI climbing 0.14 percent to 358,500 won.

The local currency ended at 1,333.4 won against the greenback, up 5.5 won from the previous session's close. (Yonhap)