South Korea's KOSPI recovered the 7,000 level, helped by foreigners' net buying for four consecutive sessions and strength in heavyweight semiconductor stocks. The Kosdaq also surged more than 5 percent, triggering a buy sidecar during the session.

On July 23, the KOSPI closed up 299.19 points, or 4.40 percent, at 7,096.89. The index opened up 165.65 points, or 2.44 percent, at 6,963.35 and rose to the 7,100 level during the session.

In the main market, foreign investors were net buyers of 2.14 trillion won. Foreigners bought a total of 5.19 trillion won over the past four sessions, leading the rebound in the domestic stock market. Institutions were also net buyers of 101.0 billion won, while retail investors were net sellers of 2.21 trillion won.

Among the top stocks by market capitalisation, Samsung Electronics closed at 270,000 won, up 9,500 won, or 3.65 percent, from the previous session. SK Hynix rose 89,000 won, or 4.86 percent, to 1,919,000 won.

Samsung Electro-Mechanics rose 7.66 percent, LG Energy Solution gained 8.41 percent and Hyundai Motor climbed 3.35 percent. Samsung Life rose 2.97 percent, Samsung Biologics gained 0.51 percent and KB Financial rose 0.69 percent.

SK Square, however, fell 0.73 percent.

The Kosdaq closed up 39.19 points, or 5.22 percent, at 790.28.

With the rise widening, a buy sidecar, a temporary suspension of the validity of program buy orders, was triggered in the Kosdaq market at 2:27 p.m.

The buy sidecar was the 14th in the Kosdaq market this year. Including sell sidecars, the number of sidecar triggers in the Kosdaq market this year was 24.

In the Seoul foreign exchange market, the won was quoted at 1,467.50 per dollar at the close, up 11.50 won from the previous session.

The move is seen as driven by a view that losses were excessive after a recent sharp drop and by expectations for earnings at heavyweight semiconductor stocks, which lifted investor sentiment. An analysis also emerged that it will take time to confirm a bottom as volatility and interest rate burdens remain high.

Huh Jae-hwan (허재환), a researcher at Eugene Investment & Securities, said, "Assuming the domestic stock market is not in a financial crisis, the likelihood of further declines is not large, but interest rates need to stabilise."