South Korean shares closed higher Wednesday as investor sentiment gained momentum from reports from China, local analysts said. The benchmark Korea Composite Stock Price Index (KOSPI) climbed 21.94 points, or 1.26 percent, to close at 1,764.49, according to the bourse operator Korea Exchange (KRX). The local index recovered the previous session's fall as a result of a report that China's manufacturing sector expanded, which relieved market concerns over a global economic recovery. Amid the gain, however, retailers, foreigners, and institutions all ended trading as net sellers. Distribution industry led the gain, posting a surge of 3.69 percent on the outlook it will see an increase in sales in the second half. Among large market cap shares, retailers, such as Lotte Shopping and Shinsegae Mall, marked a gain of 7 percent and 3 percent, respectively. The junior bourse KOSDAQ also jumped 5.04 points, or 1.08 percent, to close at 469.75. The derivatives went together with spot trading moves, with the KOSPI 200 Futures market advancing 2.60 points, or 1.15 percent, to 229.41, according to the bourse operator. The local currency shot up against the U.S. dollar, up 13.40 won to end trading at 1,184.70 won. Bond prices closed sharply lower, with the yield on three-year Treasury notes gaining 0.10 percentage point to 3.65 percent. 