Seoul shares end nearly 1 pc higher on optimistic US-Japan tariff talks

The benchmark Korea Composite Stock Price Index (KOSPI) added 22.98 points, or 0.94 percent, to close at 2,470.41, rebounding from a 1.21 percent drop the previous day, reports Yonhap news agency.

Trade volume was moderate at 589.6 million shares worth 6.5 trillion won ($4.58 billion), with winners beating losers 638 to 225.

Institutions purchased a net 346.2 billion won worth of stocks, while foreign and retail investors sold a net 351.9 billion won and 87.4 billion won, respectively.

Overnight, U.S. President Donald Trump said there was "big progress" in talks to strike a deal for Japan to avoid higher levies.

The Washington-Tokyo trade talks are expected to give indications regarding upcoming negotiations with other allies, including South Korea.

However, Wall Street closed sharply lower after Federal Reserve Chair Jerome Powell said higher-than-expected tariffs would lead to higher inflation and slower growth and remained pessimistic about a possible rate cut.

Additionally, the Bank of Korea froze the key interest rate at 2.75 percent, citing concerns over fluctuating foreign exchange rates and rising household debts amid uncertainty from U.S. tariff policies.

"While Powell's comments weighed on the Korean market, investors were boosted by progress in tariff negotiations with Japan," said Lee Jae-won, an analyst at Shinhan Securities.

In Seoul, semiconductor led the daily gain, overcoming the previous day's sharp drop following the recent U.S. ban on exports of Nvidia's H20 chips to China.

Samsung Electronics, the world's largest memory chipmaker, rose 0.73 percent to 55,100 won, and its chipmaking rival SK hynix climbed 0.57 percent to 175,000 won.

Food companies and cosmetics makers were also strong. Food giant CJ Cheiljedang went up 2.53 percent to 243,500 won, and leading cosmetics brand AmorePacific jumped 3.77 percent to 115,700 won.

Carmakers and battery companies finished mixed. Top carmaker Hyundai Motor stayed unchanged at 181,700 won, and its sister Kia advanced 0.35 percent to 85,000 won.

Leading battery maker LG Energy Solution dropped 0.15 percent to 342,500 won, while Samsung SDI increased 2.2 percent to 180,900 won.