Seoul: South Korean stocks traded more than 1 percent higher late Friday morning, heading toward a new all-time high, as big-cap chip shares sharply gained ground tracking a recent rally of artificial intelligence (AI) shares on Wall Street. The benchmark Korea Composite Stock Price Index (KOSPI) had risen 37.19 points, or 1.11 percent, to 3,381.39 as of 11:20 a.m., surpassing the record high of 3,344.2 posted the previous day.

According to Yonhap News Agency, overnight, major U.S. indexes closed higher, with the Dow Jones Industrial Average jumping 1.36 percent, the tech-heavy Nasdaq composite rising 0.72 percent, and the S and P 500 adding 0.85 percent. Investor sentiment was boosted as the latest U.S. consumer price index (CPI) buoyed bets the Fed will move to cut key rates next week. The CPI showed inflation is still above the Fed's 2 percent target but is calm enough for it to give the green light to cut rates, considering the weakness in the labor market.

In Seoul, market bellwether Samsung Electronics jumped 2.32 percent, and its chipmaking rival SK hynix shot up 6.68 percent. Internet portal operator Naver increased 1.5 percent, and Kakao, the operator of the country's dominant mobile messenger, surged 7.43 percent. SK Square, an investment firm for the semiconductor and IT sectors, soared 5.27 percent, while leading battery maker LG Energy Solution gained 0.86 percent.

Major financial shares were also strong, with KB Financial up 1.11 percent and Shinhan Financial rising 1.33 percent. On the other hand, shipbuilders were weak, with HD Hyundai Heavy slipping 2.51 percent, Hanwha Ocean losing 0.8 percent, and HD Korea Shipbuilding dipping 1.77 percent. Power plant manufacturer Doosan Enerbility dropped 1.8 percent.

The local currency was trading at 1,388.8 won against the U.S. dollar at 11:20 a.m., up 3.0 won from the previous session.