Seoul: South Korean stocks rebounded by more than 2 percent to settle above the 7,800-point mark as investors scooped up semiconductor and auto shares amid lingering Middle East tensions ahead of the U.S.-China summit. The local currency declined against the U.S. dollar.

According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index opened 1.69 percent lower but reversed course to close at 7,844.01, up 200.86 points, or 2.63 percent. The index had previously fallen 2.29 percent to finish at 7,643.15 on Tuesday due to profit hunting, ending a five-session bullish run driven by tech stocks.

Overnight, U.S. inflation in April rose at the fastest pace in nearly three years, while oil prices climbed back above US$100 per barrel amid fading hopes for a Middle East peace deal. However, investor sentiment improved on expectations that the upcoming U.S.-China summit could help ease concerns over the Iran conflict.

Market sentiment also improved as the prime minister and finance minister called on Samsung Electronics' management and labor to sit again to resolve their sparring stance over a pay raise and bonus payments. The two sides failed to narrow differences over sticky issues in overnight mediation talks.