The Korea Composite Stock Price Index closed at 2,013.37 points on Monday, up 1 percent from the previous trading day powered by 17 consecutive sessions of buying by foreign investors.
The last time the KOSPI closed above 2,010 points was in March.
Foreign investors bought W500 billion (US$1=W1,082) worth of Korean stocks on Monday. The main index rose above the 2,000 mark on foreign buying last week but fell back below on profit taking on Friday.
News from the U.S. that former Treasury Secretary Lawrence Summers pulled out of the race to succeed Federal Reserve Chairman Ben Bernanke buoyed market sentiment here. Summers is considered an austerity hawk, and the possibility that he would land the job fanned fears of a quick end to quantitative easing in the U.S.
The next candidate in line, Fed deputy chief Janet Yellen, is a "dove" who has supported Bernanke's money-printing policy.
"It looks as if the buying spree among foreign investors will continue for the time being and the KOSPI could rise to 2,100 points before the end of the year," said Lim Jin-kyun at IBK Securities.
The won, meanwhile, strengthened as foreigners purchased the Korean currency to buy domestic stocks. It closed up W4.8 against the dollar at W1,082.2.