South Korean stocks rose to their highest in five months on Friday as investors, lifted by the European Central Bank's (ECB) upgrade in its outlook for the eurozone economy and its quantitative easing bond-buying, scooped up stocks, analysts said. The South Korean won rose against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) rose

14.56 points, or 0.73 percent, to 2,012.94. Trading volume was moderate at 390 million shares worth 4.75 trillion won (US$3.58 billion), with gainers outnumbering losers 418 to 400. 

Foreign investors extended their buying of local stocks to a 10th consecutive day with a purchase of a net 287 billion won.

Analysts said appetite for risky assets were boosted by liquidity provided by central banks around the world.

The ECB starts its bond-purchasing program amounting to a monthly 60 billion euros from Monday as the central bank seeks to chase off deflation.

"The ECB's step would fuel inflows of global capital into emerging markets, which could become a boon for the local stock market," said Noh Sang-won, an analyst at Dongbu Securities.

Tech, auto, brokerage and chemicals stocks led the overall market gain, while some defensive shares suffered losses.

Market bellwether Samsung Electronics, the nation's top tech firm, advanced 1.41 percent to finish at 1,442,000 won, and global chipmaker SK hynix was up 1.54 percent to 46,200 won.

Hyundai Motor, the country's top automaker, went up 3.28 percent to end at 173,000 won, and its smaller affiliate Kia Motors climbed 2.35 percent to 48,000 won.

Samsung Securities, the nation's largest brokerage firm by market value, surged 3.33 percent to finish at 48,150 won, and NH-Woori Investment & Securities rose 4.66 percent to end at 12,350 won.

In contrast, SK Telecom, the No.1 mobile operator, fell 2.41 percent to end at 283,000 won, and top steelmaker POSCO shed 1.45 percent to 272,500 won.

The secondary and tech-laden KOSDAQ continued to rise, reaching its highest in almost seven years on a continued buying by foreign investors. The KOSDAQ index closed at 635.84, up 4.41 points, or

0.7 percent, from the previous session's close.

The local currency ended at 1,098.70 against the U.S. dollar, up 2.6 won from Thursday's close.

Bond prices, which move inversely to yields, ended higher. The yield on three-year Treasurys fell 4.3 basis points at 1.935 percent while the return on the benchmark five-year government bonds dropped 3.2 basis points to 2.042 percent. (Yonhap)