South Korea's KOSPI climbs more than 2 percent in early trade and moves back above the 7,000 mark for the first time in 21 days. With U.S. inflation data matching market expectations, pressure from interest rates eases. Net foreign buying and strength in heavyweight semiconductor stocks are lifting the index.

At around 9:10 a.m. on Aug. 14, the KOSPI is up 188.01 points, or 2.76 percent, from the previous session at 7,001.35. It is the first time since July 24 that the KOSPI has traded above 7,000 intraday, after 21 days. The index rose to as high as 7,000.78 intraday then, but later plunged and ended at 6,690.62.

In the main bourse, foreign investors are leading gains with net purchases of 325.4 billion won. Individuals and institutions are net sellers of 37.7 billion won and 273.3 billion won, respectively.

Large semiconductor stocks are driving the index higher. Samsung Electronics is up 1.87 percent at 273,000 won and SK Hynix is up 6.09 percent at 1.69 million won.

SK Square is up 3.49 percent at 1.156 million won and Samsung Electro-Mechanics is up 4.26 percent at 1.567 million won.

Hyundai Motor is also surging 6.09 percent to 444,000 won. Samsung Life Insurance is up 5.32 percent, Samsung C&T is up 1.23 percent and LG Energy Solution is up 0.68 percent. Samsung Biologics is down 0.06 percent.

The Kosdaq is also higher. At the same time, the index is up 12.63 points, or 1.47 percent, at 874.00.

In the Seoul foreign exchange market, the won is at 1,417.50 per dollar, up 2.70 won from the previous session.

U.S. stocks rose overnight after the producer price index (PPI) for July came in below expectations and semiconductor shares were strong. The Standard & Poor's 500 gained 0.65 percent, the Nasdaq rose 0.81 percent and the Dow Jones index added 0.13 percent. The Philadelphia Semiconductor Index also rose 0.46 percent.

The U.S. PPI for July rose 4.7 percent from a year earlier, below the market forecast of 4.9 percent. The core PPI rose 4.2 percent, in line with expectations. The analysis is that worries about U.S. Federal Reserve rate hikes are easing as producer-price pressures also ease following slower employment growth and stable consumer prices.

Strength in U.S. semiconductor shares is also influencing the domestic market. SanDisk jumped 13.8 percent after laying out medium- to long-term revenue growth, expanded long-term supply contracts and a shareholder return policy at an investor day. Micron rose 4.2 percent.

Han Ji-young (한지영), a researcher at Kiwoom Securities, analysed that "if you look at the fact that it is rebounding in the form of a virtuous cycle of rotation between sectors rather than a concentration in a few sectors, supply-and-demand fundamentals are improving compared with before."