The benchmark KOSPI closed at 6,742.74, up 0.68 percent or 45.78 points from the previous session. The index opened 2.40 percent lower at 6,535.93 and fell as low as 6,408.82 before reversing course. It climbed to an intraday high of 6,747.16 and finished near the day's peak.
The rebound was broad, with 647 stocks advancing while 226 declined, and 34 finished unchanged.
Foreign investors remained heavy sellers for a third straight session. They unloaded a net 3.82 trillion won ($2.76 billion) of KOSPI shares. Retail investors bought a net 1.05 trillion won. Institutions also purchased a net 1.17 trillion won and helped the late recovery.
Seoul's two chip heavyweights opened sharply lower as disappointment over recent shareholder-return announcements continued to weigh on sentiment, but both recovered from early losses and helped the KOSPI reclaim the 6,700 level.
Samsung Electronics closed unchanged at 257,000 won after falling as much as 4.67 percent. SK hynix erased an early drop of more than 4 percent and finished 0.42 percent higher at 1,678,000 won.
The turnaround gained momentum as buying spread beyond semiconductors and institutions increased purchases of large-cap shares.
Samsung Electro-Mechanics rose 3.34 percent to 1,362,000 won while Hyundai Motor gained 1.69 percent to 421,000 won.
Samsung Biologics added 0.76 percent to 1,585,000 won and Samsung C&T rose 0.69 percent to 367,000 won. KB Financial climbed 2.02 percent to 166,400 won.
Nuclear power-related shares were among the strongest performers. Doosan Enerbility jumped 10.55 percent to 80,700 won.
Some major stocks remained under pressure. SK Square fell 1.49 percent to 1,060,000 won and LG Energy Solution dropped 3.45 percent to 349,500 won. Samsung Life slipped 0.18 percent to 285,000 won while Hanwha Aerospace declined 0.27 percent to 1,102,000 won. Hyundai Mobis edged down 0.10 percent to 498,000 won.
Gains were also broad across sectors. Construction led with a 7.16 percent rise. Electric utilities climbed 6.42 percent and air freight and logistics gained 6.30 percent. Nonferrous metals rose 5.60 percent while machinery advanced 5.59 percent.
Energy equipment and services added 4.41 percent while online retail gained 4.36 percent. Cosmetics rose 3.89 percent while electronic equipment and devices climbed 3.82 percent. Handset shares advanced 3.30 percent.
The junior KOSDAQ also reversed steep early losses to close 1.70 percent higher at 827.15.
The index fell as low as 781.89 during the session before turning higher and finishing at its intraday peak.
Foreign investors bought a net 132.7 billion won of KOSDAQ shares while institutions purchased 15.6 billion won. Retail investors sold a net 137.5 billion won.
Buying was widespread, with 1,186 stocks rising against 466 decliners. Another 74 finished unchanged.
Robot maker Rainbow Robotics rose 2.25 percent to 454,500 won. Semiconductor equipment maker Jusung Engineering jumped 7.71 percent to 178,800 won.
Wonik IPS, which makes semiconductor and display production equipment, climbed 5.55 percent to 112,300 won. LEENO Industrial, a semiconductor testing parts maker, gained 4.33 percent to 67,400 won.
Laser equipment maker EO Technics rose 3.48 percent to 401,500 won. SFA Engineering, which operates smart-factory and semiconductor packaging businesses, surged 11.12 percent to 116,900 won.
Some of the KOSDAQ's largest stocks remained lower. Biotech company Alteogen fell 4.68 percent to 305,500 won.
Battery materials group EcoPro dropped 3.07 percent to 85,200 won. Cathode materials maker EcoPro BM lost 3.85 percent to 112,500 won.
Trading on alternative trading platform Nextrade totaled 11.78 trillion won across its pre-market and main-market sessions.
The Korean won weakened slightly to 1,385.50 per dollar in afternoon trading from 1,381.90 in the morning.
Across the region, markets were mixed as investors stayed cautious ahead of Nvidia's earnings and the Jackson Hole symposium later this week for signals on the Federal Reserve's interest-rate outlook.
Japan's Nikkei 225 rose 0.5 percent to 65,856.43 after reversing early losses. The Shanghai Composite gained 0.19 percent to 3,889.44 as mainland stocks held firm despite lingering concerns over high valuations in technology-related names.
Hong Kong's Hang Seng Index slipped 0.09 percent to 25,495.53 as pressure on technology shares kept the market in negative territory.
AJP Takeaways
• The KOSPI reversed an intraday drop of more than 4 percent to close 0.68 percent higher as Samsung Electronics and SK hynix recovered.
• Foreign investors sold a net 3.82 trillion won of KOSPI shares but institutional and other-corporate buying helped absorb the selling.
• Gains broadened beyond semiconductors into construction and nuclear power stocks while the KOSDAQ also reversed early losses to rise 1.70 percent.
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