Trade volume was light at 286.5 million shares worth 20 trillion won ($15 billion). Winners far outnumbered losers 757 to 134.
Investors went bargain hunting for large-cap tech shares, particularly the country's top chipmakers, which tumbled over 10 percent the previous session.
Foreigners were net buyers, snapping up 343.5 billion won worth of stocks, while retail and institutional investors offloaded a combined net 1.17 trillion won.
U.S. Federal Reserve Chairman Kevin Warsh, right, speaks with IMF Managing Director Kristalina Georgieva during the 2026 Annual Meetings of the IMF and the World Bank Group in Bangkok, Thailand, on Oct. 16.EPA/YONHAP
During the 2026 IMF-World Bank annual meetings in Bangkok, Fed Chair Kevin Warsh voiced optimism for the U.S. economy and its strength while he refrained from signaling whether there will be a rate hike this month.
Warsh's comments revived appetite for risky assets as a series of recent U.S. inflation data signaled that prices are rising at a faster pace than expected.
Investor sentiment was also lifted by the Fed chair's expression of optimism for AI, which he described as "probably the most consequential change to the U.S. and the global economy in my lifetime."
"It is meaningful that the Fed Chair maintained a positive assessment of the AI industry's structural growth, despite concerns over growing credit risks and funding burdens at such companies," Seo Sang-yong, an analyst at Mirae Asset Securities, said.
Comments from Nvidia chief Jensen Huang also helped elevate financial health concerns over the AI industry as well. On Thursday, Huang expressed optimism for its partner cloud company, CoreWeave, saying the firms' financial strength is "improving every day."
Shares of CoreWeave slid over 15 percent Wednesday after a dramatic spike in its corporate bond yields of near 15 percent triggered investor anxiety over the company's heavy AI-related debt burden.
Words reading ″Artificial intelligence AI″ and miniatures of robot and toy hands are pictured in this illustration taken Dec. 14, 2023.REUTERS/YONHAP
In Seoul, most market heavyweights closed higher.
Semiconductor giant Samsung Electronics was up 2.62 percent to 215,500 won, while industry rival SK hynix inched up 0.79 percent to 1,272,000 won.
Carmaker Hyundai Motor added 5.58 percent to 312,000 won, defense giant Hanwha Aerospace advanced 7.77 percent to 888,000 won, and bio firm Celltrion climbed 6.53 percent to 194,000 won.
The Korean won weakened by 13.2 won against the U.S. dollar, trading at 1,331.4 won as of 3:30 p.m.
