The main KOSPI closed at 6,912.37, up 104.16 points or 1.53 percent from the previous session, after opening 2.76 percent higher at 6,996.12.
The country's two major chipmakers SK hynix and Samsung Electronics kept only part of their opening gains, and the day's largest moves went instead to power equipment and battery makers. Tokyo did not follow Seoul at all.
The BOK's quarter-point hike raised the base rate to 3 percent in a six-to-one vote, its highest level since early last year.
The central bank also raised its growth forecast for this year to 3.3 percent from 2.6 percent, citing the semiconductor boom as a key driver of growth even as it moves to curb the economy with higher interest rates.
Nvidia posted revenue of US$96.2 billion for its fiscal second quarter, more than double the figure from a year earlier, and adjusted earnings of $2.22 per share. But that was enough to revive the chip trade at the open, though not enough to sustain the gains.
SK hynix closed at 1,730,000 won ($1,249), up 2.49 percent, after rising more than 5 percent early in the session. Samsung Electronics ended at 266,000 won ($192), up 1.72 percent, off an opening gain of more than 3 percent.
Foreign investors bought a net 142.2 billion won ($103 million), their first session of net buying this week. They had sold a net 9.44 trillion won over the five sessions through Tuesday and sold again on Wednesday. Individuals sold a net 1.92 trillion won ($1.39 billion).
Electrical equipment, the sector supplying cable and switchgear to data centers, rose 10.3 percent as a group, the strongest sector move of the session.
Samsung SDI rose 10.08 percent to 569,000 won ($411) on the day its 4.45 trillion won sale of Samsung Display shares was due to settle. LG Energy Solution added 5.56 percent to 370,500 won ($268).
Hyundai Motor fell 2.45 percent to 398,000 won ($287).
The junior KOSDAQ closed at 837.65, up 1.30 percent.
The Nikkei 225 slipped 0.2 percent to 66,131.98, with memory maker Kioxia up 5.0 percent and chip test equipment maker Advantest down 3.1 percent. The composite index in Shanghai ended higher.
The won strengthened against the dollar, closing at 1380.50.
Meanwhile, the rate projections released alongside the decision showed that 16 of 21 BOK board members expected the rate to rise above 3 percent within six months, with none forecasting a rate below 3 percent. Investors who bought the market's early gains are now betting that the AI boom can outweigh the impact of higher interest rates.
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