The KOSPI reclaimed the 7,000 level on Sept. 21 on institutional buying and strength in major chipmakers. Samsung Electronics rose nearly 5 percent, leading the index higher.

The KOSPI closed up 113.49 points, or 1.65 percent, at 7,007.72. It opened up 44.11 points, or 0.64 percent, at 6,938.34. Shortly after the open, it extended gains and finished while holding above 7,000.

In the main bourse, institutions net bought 1.49 trillion won. Retail investors and foreigners net sold 2.98 trillion won and 171.9 billion won, respectively.

Large-cap shares, led by semiconductors, gained. Samsung Electronics ended up 13,000 won, or 4.98 percent, at 274,000 won. SK Hynix rose 11,000 won, or 0.59 percent, to 1,868,000 won.

SK Square climbed 4.45 percent, Samsung Electro-Mechanics gained 2.95 percent, Samsung C&T rose 4.70 percent, Samsung Biologics added 0.29 percent and KB Financial Group rose 1.49 percent.

LG Energy Solution fell 3.30 percent and Hyundai Motor slipped 1.64 percent.

The Kosdaq also rose. It closed up 9.15 points, or 1.11 percent, at 836.27.

The won rose 6.70 won, or 0.48 percent, to 1,381.30 per dollar.

Strength in U.S. semiconductor shares such as Micron and SanDisk on expectations of rising memory prices on Sept. 18 also influenced domestic chip investment sentiment.

The Philadelphia Semiconductor Index rose 2.3 percent at the time. The market had expected the KOSPI this week to try to re-enter the 7,000 level as it digests U.S. long-term yields, domestic exports and a U.S.-China summit. Still, with fewer trading days ahead of the Chuseok holiday, short-term supply-demand volatility could continue.

Han Ji-young (한지영), a researcher at Kiwoom Securities, analysed that as a wait-and-see mood spreads ahead of the holiday, lower turnover and a supply-demand vacuum could emerge, but said there is no need to interpret it as a full-fledged change in the stock market's trend.