The benchmark Korea Composite Stock Price Index (KOSPI) rose 0.8 percent to close at 928.79.
"Investors found some relief and bet foreign funds would keep flowing into the local market as US interest rates are still low and the Fed promised no drastic move," said Song In-ho, a fund manager at Kyobo Investment Trust and Management.
The Fed raised US interest rates by a quarter-percentage point on Wednesday, extending a policy of gradually lifting borrowing costs to levels high enough to ward off inflationary pressures in the United States, a key market for local exporters.
Shares in POSCO, the world's fifth-largest steel maker, rose 3 percent to end at 188,000 won amid hopes it would increase domestic steel prices to offset the impact of higher raw materials costs.
The company also said after the market closed it would buy back 331 billion won worth of its own shares over the next three months to boost share prices.
Shares in Kookmin, the country's top lender, finished up 2.9 percent at 44,850 won as it said fourth-quarter losses shrank from a year earlier as more consumers paid off their credit card debts.
Kookmin posted a loss of 127.3 billion won against a shortfall of 548.3 billion won a year earlier and better than a Reuters forecast of 443.6 billion won.
Analysts are also expecting a turnaround for Kookmin this year, helped by a recovery in the credit card and household sectors.
"The outlook for Kookmin is bright as it has aggressively set up provisions against bad loans," said Kim Sung-ki, a fund manager at Chohung Investment Trust & Management. "We expect earnings to improve significantly this year as a result of that."
Shinhan Financial Group, the country's second-largest financial services provider, climbed 3.5 percent to 26,550 won after it reported a surge in profits on Wednesday.