South Korean stocks advanced Tuesday, the first trading session of 2018, as large cap tech and chemical shares gained ground, analysts said. The Korean won sharply rose against the US dollar to reach an over three-year high.

The benchmark Korea Composite Stock Price Index added 12.16 points, or 0.49 percent, to end at 2,479.65. Trade volume was light at 244 million shares worth 4.4 trillion won ($4.1 billion), with winners outnumbering losers 499 to 333.

The local stock market opened higher led by an increase in major tech and chemical shares, and extended the gains in the afternoon.

"The improved Chinese purchasing managers' index and continued growth trend in South Korean exports are positive factors for the local bourse," said Seo Sang-young, an analyst at Kiwoom Securities Co.

Foreigners scooped up a net 130 billion won, while institutional investors and individuals offloaded a net 143 billion won and 27 billion won worth of stocks, respectively.

Top market cap Samsung Electronics rose 0.12 percent to end at 2,551,000 won, while global chipmaker SK hynix went up 0.13 percent to finish at 76,600 won.

LG Chem, the country's top chemicals maker, advanced 1.48 percent to 411,000 won, after announcing earlier in the day it will spend 1 trillion won on research and development this year.

LG Chem's spending on R&D came to 780 billion won in 2016 and 1 trillion won in 2017.

Cosmetics makers also remained in positive terrain, with market leader AmorePacific advancing 2.63 percent to 312,500 won and No. 2 player LG Household and Health Care adding 0.93 percent to 1,200,000 won.

Carmakers were among the losers, with the country's top automaker Hyundai Motor plunging 4.17 percent to 149,500 won.

In regards to its annual sales targets, Hyundai Motor Vice Chairman Yoon Yeo-chul said in a speech for 2018 earlier in the day that the group expects weak global growth this year due to shrinking demand in the United States, China and Europe.

Hyundai's smaller affiliate Kia Motors also shed 2.09 percent to finish at 32,800 won, and the country's largest auto parts maker Hyundai Mobis decreased 2.28 percent to 257,000 won.

No. 1 steelmaker POSCO jumped 1.95 percent to 339,000 won, and Naver, the largest online portal operator here, gained 1.72 percent to 885,000 won.

The local currency ended at 1,061.20 won against the US dollar, up 9.30 won from the previous session's close, the highest since October 2014. 

Bond prices, which move inversely to yields, ended higher. The yield on three-year Treasurys lost 1.6 basis points to 2.119 percent, and the return on benchmark five-year government bonds shed 0.5 basis point to 2.338 percent. (Yonhap)