* German data improves economic outlook
* Foreign buying biggest in over two months
* LG Display leads tech shares higher
* Automakers extend rebound as yen concerns ease
By Hyunjoo Jin
SEOUL, Feb 20 (Reuters) - South Korean shares jumped 2 percent on Wednesday, their biggest daily percentage gain in more than five months, with foreign investors stepping up their purchases as valuations fall to attractive levels.
The KOSPI has lagged Asian rivals this year, weighed down by concerns that sharp declines in the yen and a firmer won will hurt overseas sales and earnings of Korean exporters - the backbone of Asia's fourth-biggest economy.
"The KOSPI had decoupled from global equities in January because of currency moves and foreign selling. But this is changing as the pace of currency movements is easing," said Shawn Oh, an analyst at Daishin Securities.
The Korea Composite Stock Price Index (KOSPI) ended up 1.95 percent at 2,024.64 points, its highest closing price since Jan.2 and marking its biggest daily percentage gain since Sept. 14.
Foreign investors snapped up stocks worth a net 568.9 billion won ($526 million) on the main bourse, the largest volume since Sept.14, according to revised data from the Korea Exchange.
Technology and automobile shares led the gains, after a pick-up in German economic sentiment improved the outlook for the euro zone, a key export market for South Korean firms.
Hyundai Motor climbed 3.1 percent and Kia Motors gained 1.9 percent.
LG Display jumped 5.1 percent after Samsung Securities raised its target price for the flat-screen maker. The brokerage said LG Display's earnings will bottom out in the current quarter and subsequently improve on growing demand for mobile devices.
Among other tech stocks, Samsung Electronics surged 3.6 percent while SK Hynix rose 2.5 percent.
The better outlook for the domestic stock markets also helped brokerage stocks. Mirae Asset Securities was up 4.2 percent, while Meritz Securities gained 3 percent.
Korea Gas Corp (KOGAS) climbed 4.7 percent after South Korea said it will hike gas prices by 4.4 percent on average from Friday, to reflect higher costs of natural gas and recoup part of the hefty losses of the state-run agency.
Move on day +1.95 percent
12-month high 2,057.28 14 March 2012
12-month low 1,769.31 25 July 2012
Change on yr +1.38 percent
All-time high 2,231.47 27 April 2011
All-time low 93.10 6 January 1981 ($1 = 1081.1250 Korean won) (Reporting by Hyunjoo Jin; Editing by Edwina Gibbs)