Sentiment was also boosted after Samsung Electronics struck a tentative deal following marathon last-minute negotiations over wages and performance bonuses, easing concerns over a possible large-scale strike at the country's biggest chipmaker.
The benchmark KOSPI surged 6.62 percent to 7,685.96 points as of around 10:30 a.m., while the junior KOSDAQ jumped 5.06 percent to 1,109.46. The sharp early gains triggered sidecar curbs on trading.
Samsung Electronics' shares climbed 6.16 percent to 293,000 won, helping drive gains in the broader market.
The South Korean won also strengthened as external uncertainties eased, trading at 1,499.5 won against the greenback, compared with the previous session’s close of 1,507.80 won.
Investor sentiment improved after global oil prices and U.S. Treasury yields retreated overnight. WTI crude fell below the US$100-per-barrel mark to around $98, while the benchmark U.S. 10-year Treasury yield slipped back into the 4.5 percent range after U.S. President Donald Trump said negotiations with Iran were in the "final stages," raising hopes for a diplomatic breakthrough.
The decline in oil prices and yields weakened demand for safe-haven assets and helped lift risk appetite across global markets from New York to Seoul.
Chip stocks also surged, with SK hynix climbing 6.88 percent to 1,865,000 won and SK Square rising 7.48 percent to 1,106,000 won amid continued optimism over the AI-driven semiconductor boom.
Automakers and industrial shares posted strong gains as well. Hyundai Motor advanced 7.43 percent to 636,000 won, Kia jumped 9.37 percent to 163,400 won and HD Hyundai Heavy Industries added 3.30 percent to 657,000 won.
Battery and electronics-related shares moved higher across the board. LG Energy Solution rose 3.38 percent to 397,500 won, while Samsung SDI surged 11.12 percent to 1,179,000 won.
Financial and biotech shares also joined the rally. Samsung Life Insurance soared 10.10 percent to 343,500 won, Samsung C&T climbed 7.96 percent to 400,000 won, Samsung Biologics gained 4.11 percent to 1,392,000 won and KB Financial rose 2.11 percent to 154,900 won.
Defense shares were also firmer, with Hanwha Aerospace advancing 3.12 percent to 1,288,000 won.
But much of the market's early gains were driven by Samsung after its management and labor union reached the deal the previous day through government-mediated talks, averting a planned strike and putting it to a union vote through May 27. The agreement eased concerns over labor unrest and addressed key union demands including bonuses and the removal of caps on incentive payments.
Markets, however, would remain cautious ahead of the vote, with investors closely watching whether the deal will hold at the country's largest chipmaker, which makes up about one-fifth of the KOSPI by market capitalization.
Meanwhile, across Asia, markets broadly moved higher, with Japan's Nikkei 225 surging 3.39 percent to 61,834.74, China's Shanghai Composite Index rising 0.84 percent to 4,196.94 and Hong Kong's Hang Seng Index adding 0.61 percent to 25,807.79 amid improving global risk sentiment.
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