South Korean shares closed 1.24 percent higher Wednesday as optimism over corporate earnings lifted sentiment, dealers said. The benchmark KOSPI gained 20.16 points at 1,649.09 on volume of 403 million shares worth 4.9 trillion won (4.2 billion dollars). Gainers outnumbered losers 450 to 307. Chipmaker Intel's better-than-expected earnings and outlook have helped renew expectations for South Korea's third-quarter reporting season. But the market did not make huge gains due to concerns that local firms may have peaked in the past three months, analysts said, adding investors may keep a cautious attitude as they check earnings of US banks. There was caution about third-quarter US corporate earnings, Eugene Investment and Securities analyst Kwak Byong-Ryel told Dow Jones Newswires, adding they might have outpaced real improvement. Gains were led by technology stocks and steelmakers, with Samsung Electronics up 1.6 percent to 769,000 won, while Hynix Semiconductor gained 0.97 percent at 20,800 won. POSCO rose 4.3 percent to 515,000 won. Hyundai Steel gained 6.7 percent to 81,700 won and LG Chem rose 1.4 percent to 211,000 won. Shinhan Financial Group fell 0.2 percent to 46,350 won and Hana Financial Group dropped 1.8 percent to 36,050 won. The local currency finished at 1,164.8 won to the US dollar, up 4 won from Tuesday's close. 