South Korean shares closed up for the first time in 7 sessions on Thursday due to a modest technical rebound from the previous session's sharp fall caused by political turmoil in Greece.

The benchmark Korea Composite Stock Price Index (KOSPI) rose 4. 71 points, or 0.26 percent, to close at 1,845.24. Trading volume stood at 435.95 million shares worth 5.59 trillion won (4.81 billion U.S. dollars).

The KOSPI started higher despite Wall Street losses overnight, and the index managed to end in positive terrain due to technical rebound from the prior session's sharp decline.

Market sentiment was boosted a little by positive economic indicators in the United States. The U.S. industrial production grew 1.1 percent in April, the fastest expansion in over a year, with housing starts rebounding in April from a five-month low.

The KOSPI's rebound, however, was limited due to fears about Europe that continued to weigh on the market. The failure of Greek party leaders to form a coalition government raised concerns that the eurozone country may have to exit the currency union.

South Korea's senior economic and financial officials said at an emergency meeting for reviewing the current market situation that global financial market instability arising from Europe's political turmoil was expected to last for a while due to the expected parliamentary re-election in Greece.

Market watchers said that volatilities in the local stock market were forecast to remain strong before the completion of another round of general elections in Greece, but experts noted that the expected turn to less tightened austerity plans stemming from the re-election may help lessen the burden for Greece.

Foreign investors kept their selling spree for 12 sessions in a row by offloading a net 63.1 billion won worth of local stocks. Foreigners dumped a total of 2.75 trillion won in local stocks over the past 12 sessions.

Retail investors and local institutions bought stocks worth 110.6 billion won and 146.5 billion won respectively, managing to succeed in driving the KOSPI into positive territory.

Large-cap shares ended mixed. After staying in positive terrain earlier, market bellwether Samsung Electronics ended in negative terrain, posting the third consecutive session of losses. Samsung shares fell 0.57 percent to 1,223,000 won.

Memory chip giant SK Hynix surged 6.29 percent to 24,500 won on views that the stocks were undervalued amid the recent decline. Top automaker Hyundai Motor ended flat at 240,500 won, but the nation's No.1 auto parts maker Hyundai Mobis fell 1.07 percent to 277,500 won.

Chemical shares ended bullish on views over undervaluation. Top crude oil refiner SK Innovation jumped 6.27 percent to 144,000 won, and its smaller rival S-Oil advanced 4.01 percent to 96,000 won. Honam Petrochemical rebounded 4.03 percent to 245,000 won, and Kumho Petrochemical climbed 4.55 percent to 115,000 won.

The local currency finished at 1,162.9 won against the greenback, up 2.8 won from Wednesday's close.

Bond prices ended lower. The yield on the liquid three-year treasury notes rose 0.01 percentage point to 3.39 percent, and the return on the benchmark five-year government bonds added 0.01 percentage point to 3.50 percent.