Foreign investors are continuing to snap up Korean stocks, helping the local bourse stage a solid performance in recent sessions on renewed optimism over the eurozone debt problem.

According to the Korea Exchange, the net amount of local stocks bought by foreign investors reached 4.3 trillion won ($3.7 billion) this month. The benchmark KOSPI, which closed at 1,825.74 on Dec. 29, ended up at 1,949.89 on Friday.

Last week saw particularly strong buying by non-Korean investors on the local stock market, with the net figure reaching 3.06 trillion won ― the biggest weekly foreign net purchase since September 2009.

The most popular choice was technology giant Samsung Electronics as foreign investors bought 598 billion won worth of its shares last week. Trailing behind were LG Chem (265 billion won), Hynix (247 billion won), Hyundai Motor (175 billion won), Samsung Heavy Industries (140 billion won) and POSCO (138 billion won).

Given that foreign investors unloaded nearly 8 trillion won last year, the net purchase spree this month was interpreted as a sign that the trend might be reversing.

The momentum began on Jan. 10 amid the continued skepticism in the financial market over the protracted eurozone fiscal crisis. Since then, foreign investors kept the net buying position for nine straight sessions, helping bolster the KOSPI.

On Friday, the daily foreign net purchase shot up to 1.4 trillion won, setting the highest figure since July 8 when foreign net-buying amounted to 1.7 trillion won.

Also encouraging was the quality of such buy orders made through foreign brokerages. Net-buying orders from American investors stood at 750 billion won from Jan. 2 through Jan. 19. European capital accounted for 710 billion won during the same period, swinging to a net-buying stance for the first time in nearly six months.

European investors had shunned away from Korean stocks since August when the sovereign debt crisis in the region began to worsen in a way that threatened the global financial sector. In the second half of last year, European investors withdrew about 7.6 trillion won from the Korean market.

One explanation for the positive change on the part of European investors is that the sentiment over the eurozone crisis is improving and the rebalancing of investment portfolios among global fund managers is benefiting the Korean market.

Another factor that encouraged investors is the U.S. economy which is likely to be propped up by another round of quantitative easing.

“Heightened expectations about the possibility that the U.S. Fed might opt for a third round of quantitative easing soon also helped foreign investors to place buy orders,” said Lee Jae-hoon, analyst at Mirae Asset Securities.

But the uncertainties surrounding the maturing Italian sovereign bonds and the second batch of bailout funds for Greece might push foreign investors to halt their net-buying position, analysts said.

By Yang Sung-jin (insight@heraldcorp.com)