Exporters rose despite the Federal Reserve raising US interest rates and signalling more increases to come.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 1.63 percent to end at 1,208.38, its highest close since ending at 1,207.06 on October 12, which was also the last time the main index ended above the psychological 1,200-level.
Local shares have risen for three consecutive days.
Samsung Electronics, the world's top maker of memory chips, rose 1.95 percent to 575,000 won, while flat panel maker LG Electronics Inc added 1.45 percent to 70,000 won.
Hyundai Motor Co, South Korea's top auto maker rose 1.51 percent to 80,900 won.
Overseas participants, who own around 40 percent of the total market capitalisation, bought a net of some 44 billion won ($42.27 million) worth in local shares after begin heavy sellers throughout last month. Institutional investors bought a net 233.6 billion won.
Banking shares reversed earlier losses to end higher after a string of positive quarterly results lifted the outlook for the sector.
Kookmin Bank rose 1.73 percent to 64,600 won, building on a near 11 percent surge on Tuesday after posting a record quarterly profit.
Trade volume reached some 326 million shares worth 3.3 trillion won compared to 427.2 million shares worth 4.2 trillion won on Tuesday. Gainers outnumbered decliners by 540 to 204 with 79 titles ending flat. Retail investors sold a net of 301.8 billion won.
The December KOSPI 200 futures index rose 2.70 points to 156.10 and the underlying KOSPI 200 spot index added 2.62 point to 155.60. South Korea's junior and tech heavy Kosdaq market rose 2.01 percent to finish at 606.80.