South Korean shares extended their winning streak to a third session Tuesday, as progress in negotiations for a new US fiscal stimulus plan boosted investor appetite for risky assets. The Korean won rose against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) rose 19.81 points, or 0.86 percent, to close at 2,327.89.

Trading volume was moderate at about 626 million shares worth some 8.9 trillion won ($7.6 billion), with gainers outnumbering losers 667 to 192.

Foreigners sold a net 74 billion won, while institutions bought a net 142 billion won. Retail investors offloaded a net 61 billion won.

The market got off to a strong start after a 1.29 percent jump the previous session.

"Optimism for the US extra stimulus plan seems to be helping to boost investor sentiment," Kiwoom Securities analyst Seo Sang-young said.

US Democrats rolled out a $2.2 trillion stimulus proposal, seeking a breakthrough in the stalled stimulus talks with the Republicans.

Investor appetite for risk further hiked, as House Speaker Nancy Pelosi said there is a chance she and Treasury Secretary Steven Mnuchin could still reach a deal.

Most large caps closed higher in Seoul.

Market bellwether Samsung Electronics closed flat at 58,200 won, and No. 2 chipmaker SK hynix gained 1.82 percent to 84,000 won.

Top pharmaceutical firm Samsung Biologics added 0.73 percent to 690,000 won, and Celltrion jumped 0.98 percent to 257,500 won.

Internet portal giant Naver retreated 0.67 percent to 296,500 won, with its rival Kakao dipping 1.22 percent to 364,500 won.

Leading chemical maker LG Chem jumped 4.47 percent to 654,000 won, and rechargeable battery maker Samsung SDI advanced 2.97 percent to 433,500 won.

Hyundai Motor, the country's largest automaker, rose 1.71 percent to 178,800 won, and top steelmaker POSCO gained 1.03 percent to 196,000 won.

The local currency closed at 1,169.5 won per dollar, up 4.1 won from the previous session's close.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year Treasurys added 0.3 basis point to 0.846 percent, but the return on the benchmark five-year government bond slipped 1 basis point to 1.07 percent. (Yonhap)