Seoul: South Korean stocks surged sharply higher for the third consecutive session on Wednesday as investors actively bought shares of major chipmakers. Concurrently, the Korean won strengthened against the U.S. dollar.

According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) increased by 233.51 points, or 3.68 percent, closing at 6,579.04. This follows gains of 0.65 percent and 0.73 percent in the previous two sessions. The KOSPI began the day 1.47 percent higher and continued to climb as foreign and institutional investors purchased significant shares in chip heavyweights.

At 11:57 a.m., the bourse operator triggered a buy-side sidecar, temporarily suspending program trading for KOSPI-listed shares for five minutes. The trading volume was moderate, with 355 million shares worth 26.21 trillion won (approximately US$18.49 billion) changing hands. The number of declining stocks outpaced advancing ones, with 477 losers compared to 378 gainers.

Foreign investors and institutions purchased a net 2.83 trillion won and 527.7 billion won worth of stocks, respectively, whereas retail investors collectively sold a net 3.19 trillion won in shares. "Large order backlogs and new orders reaffirmed that investment in artificial intelligence (AI) infrastructure and semiconductor demand remain solid, stimulating investor sentiment," noted Lee Kyung-min, an analyst at Daishin Securities.

Overnight, the Dow Jones Industrial Average fell by 0.34 percent, the S and P 500 declined by 0.32 percent to 7,728.2, and the Nasdaq composite dropped by 0.60 percent. In Seoul, large-cap stocks closed higher, with semiconductor giant Samsung Electronics rising by 6.68 percent to 255,000 won per share and SK hynix increasing by 5.54 percent to 1.5 million won.

SK Square, the parent company of SK hynix, saw an 8.36 percent increase to 1.02 million won, while Samsung Electro-Mechanics, an electronics component affiliate of Samsung Electronics, grew by 5.78 percent to 1.34 million won. LG Energy Solution increased by 1.13 percent to 358,500 won, and leading automaker Hyundai Motor rose by 1.61 percent to 409,500 won.

The Korean won was quoted at 1,415.7 won against the U.S. dollar at 3:30 p.m., a rise of 0.3 won from the previous day's stock trading close. Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys decreased by 1.7 basis points to 3.791 percent, while the return on benchmark five-year government bonds dropped by 1.7 basis points to 4.025 percent.