Seoul: Seoul shares closed higher Friday to end their three-day decline as investors' concerns over a bubble in the artificial intelligence (AI) sector were eased following robust earnings from Broadcom on Wall Street overnight. The local currency fell against the U.S. dollar.

According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) gained 56.54 points, or 1.38 percent, to close at 4,167.16. Trade volume was moderate at 421 million shares worth 16.3 trillion won (US$11 billion), with gainers outpacing losers 655 to 221.

Foreign investors purchased a net 41.3 billion won worth of local shares, while individuals offloaded a net 1.46 trillion won, and institutions bought a net 1.41 trillion won. Investors' earlier concerns about a potential bubble in the AI sector were alleviated by Broadcom's strong earnings report on Wall Street.

"The strategy of expanding exposure to AI-related stocks will remain valid," Han Ji-young, a researcher at Kiwoom Securities, commented. Analysts noted that the Korea Exchange's (KRX) warning advisory on SK hynix Inc. is unlikely to significantly impact the overall direction of chipmakers.

The advisory was issued after SK hynix posted sharp gains this year due to strong memory chip sales amid the AI boom. Investors are prohibited from buying stocks under the advisory through margin trading. SK hynix shares increased 1.06 percent to 571,000 won.

Samsung Electronics saw a rise of 1.49 percent to 108,900 won, while LG Energy Solution dropped slightly by 0.11 percent to 445,500 won. Samsung Fire and Marine Insurance experienced a sharp decline of 22.3 percent to 489,500 won, following a previous day's abrupt 28.31 percent gain without clear reason.

Among other major stocks, Hyundai Motor added 2.03 percent to 301,500 won, Kia gained 2.36 percent to 125,800 won, and Hanwha Aerospace surged 6.31 percent to 961,000 won. The local currency was quoted at 1,473 won against the greenback at 3:30 p.m., slightly down by 0.7 won from the previous session.

Bond prices ended higher as yields moved inversely. The yield on three-year Treasurys fell 0.8 basis point to 3.093 percent, and the return on the benchmark five-year government bonds decreased 1.1 basis points to 3.35 percent.