The benchmark KOSPI surged 6.24 percent or 427.58 points to close at 7,284.41, rebounding above 7,000 just two days after falling below the level earlier this week.
Foreign investors bought a net 2.32 trillion won (US$1.56 billion) worth of shares, while institutions purchased a net 182.3 billion won. Retail investors sold a net 2.47 trillion won. A buy-side sidecar was triggered minutes after the opening bell as program buying accelerated.
Buying gathered pace after U.S. consumer inflation came in below market expectations, easing concerns over additional Federal Reserve tightening. Semiconductor shares also gained after ASML reported stronger-than-expected second-quarter earnings, raised its 2026 revenue forecast and announced plans to expand production capacity for EUV lithography systems.
Semiconductor heavyweights led the advance. SK hynix climbed 8.8 percent to 2,082,000 won after its U.S.-listed ADR surged more than 27 percent overnight, while Samsung Electronics gained 6.3 percent to 279,500 won. Hanmi Semiconductor soared 29.9 percent as buying spread across the AI semiconductor supply chain. Hansol Technics advanced 23.7 percent after reporting a 96 percent subscription rate for its rights offering, while Daeduck Electronics gained 22.0 percent.
The rally extended across the broader market, with 711 KOSPI-listed stocks advancing and 169 declining. Electronics equipment, communications equipment and semiconductor-related companies were among the day's strongest performers.
The tech-heavy KOSDAQ climbed 5.80 percent to close at 829.43. Foreign investors bought a net 23.1 billion won and institutions purchased 108.5 billion won, while retail investors sold a net 140.7 billion won.
HLB finished at the daily limit, while Jeju Semiconductor rose 20.9 percent. Peptron gained 18.2 percent, Amotech climbed 20.8 percent, and GigaLane jumped 29.9 percent after the National Information Society Agency said Korean-developed Open RAN equipment and AI-based network solutions would be deployed in demonstration projects in Japan. Semiconductor-related companies including TLB, Simtech Holdings and Wonik IPS also posted double-digit gains.
The Korean won strengthened for a seventh consecutive session against the U.S. dollar, closing at 1,487.8 won.
Japan's Nikkei 225 gained 1.5 percent and Hong Kong's Hang Seng Index rose 1.4 percent. China's Shanghai Composite slipped 0.5 percent after second-quarter gross domestic product grew 4.3 percent from a year earlier, below market expectations.
Brent crude traded above $85 a barrel as renewed tensions involving Iran kept supply concerns in focus.
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