Korea's benchmark KOSPI peaked on Tuesday to end at 2,61, its highest closing mark since August 2011.
The rise was mainly due to strong foreign buying.
Foreign investors have bought almost 550 million U.S. dollars worth of Korean shares over the past week as their reluctance to buy Korean shares has somewhat waned.
Up until now, foreign investors were reluctant to buy Korean shares due to the country's heavy reliance on the Chinese economy and uncertainties over Korea's economic policy direction.
China recorded growth of 7.5-percent in the second quarter of this year up zero.one-percentage-point from the previous quarter buoyed by stimulus measures from Beijing.
"The Chinese economy seems to be starting to recover from its down cycle of less than 8 percent growth in recent months. But the main trigger has been Korea's new economic team led by finance minister Choi Kyung-hwan and the stimulus measures to revitalize the economy."
Despite the record-breaking gains, Korean stocks lag far behind six other emerging markets in Asia on the year.
The KOSPI has risen less than 2 percent so far this year, a stark contrast to India's 23 percent and Taiwan's near 10 percent rise.
Kim Ji-yeon, Arirang News.