Seoul, Aug 31: South Korean shares recovered from a sharp early decline to finish higher on Monday, supported by gains in major technology and battery stocks despite renewed concerns over US interest rates and geopolitical tensions.

The benchmark Korea Composite Stock Price Index (KOSPI) opened about 2.6 per cent lower but reversed course during the session, closing 31.14 points, or 0.46 per cent, higher at 6,820.02.

Technology stocks led the recovery. Samsung Electronics gained 1.17 per cent, while SK hynix rose 1.27 per cent. LG Energy Solution advanced 2.16 per cent, while Hyundai Motor climbed 1 per cent.

The market remained under pressure earlier in the session after US Federal Reserve Chair Kevin Warsh signalled that inflation continues to be a concern, keeping expectations of further rate increases alive. Higher US rates and bond yields can affect emerging-market assets by strengthening the dollar and reducing the appeal of riskier investments.

Investor sentiment was also influenced by renewed tensions in the Middle East, particularly concerns surrounding developments in the Strait of Hormuz. Such developments can affect global energy prices and increase uncertainty for markets and businesses.

Despite the cautious backdrop, the recovery in Seoul was supported by renewed buying in technology stocks, reflecting continued investor interest in the region’s semiconductor and electronics sectors.

Not all sectors participated in the rebound. Defence major Hanwha Aerospace fell 4.75 per cent, while Korean Air declined 2.09 per cent.

The South Korean won also strengthened, gaining 3.9 won against the US dollar to trade at 1,368.6 won.

The market’s performance highlights the delicate balance investors are maintaining between optimism over technology and semiconductor demand and concerns over global interest rates, inflation and geopolitical risks.

For South Korea’s economy, the strength of semiconductor and technology companies remains important, given their major contribution to exports and industrial activity. Continued demand for chips and advanced electronics could support corporate earnings and broader economic growth, while higher energy costs and tighter global financial conditions remain key risks.