Emboldened by firmer crude prices and hopes for fresh stimulus by major economies, foreign investors have been snapping up Korean stocks this month, driving a market rally, industry watchers said Monday.

In the first eight trading sessions of March, offshore investors bought a net 1.9 trillion won ($1.6 billion) worth of local shares, mostly beaten-down large caps, according to data by the Korea Exchange.

On Thursday alone, foreign net buying came to 650.9 billion won, the largest single day purchase not seen since April 22 last year.

Boosted by strong foreign buying, the benchmark Korea Composite Stock Price Index (KOSPI) breached the 1,970-point mark on Friday, renewing a yearly high.

During the eight-session period, foreigners mostly loaded up on undervalued large-cap issues, such as top steelmaker POSCO and market bellwether Samsung Electronics.

Offshore investors invested the largest amount of money in POSCO at 207.1 billion won, followed by Samsung Electronics with 183 billion won, leading automaker Hyundai Motor with 149.1 billion won and chip giant SK hynix with 142.7 billion won.

Market watchers attributed the brisk foreign stock buying to signs of a rebound in global oil prices and expectations of stimulus measures by the United States and Japan, which have made offshore investors less risk-averse.

International crude prices ended sharply higher on Friday following an International Energy Agency report, which said the oil market may have hit its nadir.

In its latest monetary stimulus last week, the European Central Bank (ECB) exceeded investor expectations by cutting all three main interest rates and increasing monthly asset purchases.

The ECB move has lifted expectations for possible pump-priming measures by the U.S. and Japanese central banks slated to hold their policy meetings this week, according to the watchers.

Analysts, meanwhile, were divided over whether foreign investors will continue their buying mode down the road.

"There is a high possibility that offshore investors will keep on purchasing local shares, buoyed by their increased appetite for risky assets and a rise in the value of the Korean currency against the U.S. dollar," said Kim Ye-eun, a researcher at LIG Investment & Securities.

Since hitting a near six-year low of 1,238.80 won against the greenback on Feb. 25, the won has been on the rise, which could help foreigners reap foreign-exchange gains over the short haul.

Other watchers, however, said foreigners' increased stock buying may be short-lived since it stems from temporary factors, such as the won's sharp rise. (Yonhap)