The index rebounded from the previous session's slump as institutions scooped up local shares, and foreigners shifted into net buying before market closing.

The market focus was on the Federal Reserve's rate-setting meeting later in the day as investors hope for comments signaling slower-than-expected pace of rate hikes next year on concerns over trade wars and the weaker global economy.

"The government's stimulus package for the domestic economy and the possibility of the Federal Reserve taking a more dovish tone seem to have lifted investor sentiment here," Ryu Yong-seok, an analyst at KB Investment & Securities, said.

Institutions and foreigners bought a net 245 billion won and 19.9 billion worth of local stocks, respectively, while retail investors sold a net 255.46 billion won.

Tech shares were mixed.

Market bellwether Samsung Electronics edged up 0.51 percent to 39,100 won, while chipmaker SK hynix shed 1.31 percent to 60,300 won.

Auto shares rallied after the government announced a set of measures to support the sluggish industry, including the extension of a consumption tax break on new car purchases until July 2019.

Leading automaker Hyundai Motor scored 4.24 percent to 123,000, and its parts maker Hyundai Mobis picked up 2.75 percent to 205,500 won.

Shipbuilders slumped on the downbeat market prospect for the next year.

Hyundai Heavy Industries, the world's largest shipbuilder by sales, declined 2.41 percent to 7,710 won, and its smaller vial Daewoo Shipbuilding & Marine Engineering tumbled 6.86 percent to 34,600 won. 

The local currency closed at 1,123.5 won against the US dollar, up 6.1 won from Tuesday's close. (Yonhap)