South Korean stocks pared early losses to close 0.7 percent higher on Friday, rebounding from their 4-month low, as China tried to attempt to ease concerns over the devaluation of its currency. The Korean won gathered ground against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) added

13.29 points to end at 1,917.62. Trade volume was moderate at 401 million shares worth 4.99 trillion won ($4.17 billion), with losers beating winners 454 to 360.

The index opened sharply lower in the morning, before staying in positive terrain. But investor sentiment remained fragile still due to lingering woes over China's stock rout and a slowdown in the world's No. 2 economy.

"The KOSPI could briefly stay below the 1,900-point level, and move in tandem with China's stock market," said Rhyu Yong-suk, an analyst at Hyundai Securities. 

"But a further crash in Chinese stocks is unlikely as the authorities are expected to roll out a set of measures to stabilize the market."

Earlier in the day, China's central bank set its fixing for the yuan stronger, for the first time in 9 trading days.

Foreigners sold a net 255 billion won, while institutional investors scooped up a net 230 billion won.

Market heavyweights closed mixed.

Top market cap Samsung Electronics gained 0.69 percent to end at 1,171,000 won, although the No. 1 tech firm in the country reported forecast-missing quarterly profits as sales of smartphones and memory chips remained sluggish.

Samsung said it probably posted an operating profit of 6.1 trillion won in the October-December period, up 15.3 percent from the 5.2 trillion won a year earlier, but down 17.5 percent from the

7.3 trillion won the previous quarter.

Global chipmaker SK Hynix shed 1.66 percent to finish at 29,700 won.

No. 1 automaker Hyundai Motor dropped 0.73 percent to end at 136,500 won, and its smaller affiliate Kia Motors declined 1.62 percent to end at 48,500 won.

LG Chem, the country's top chemicals maker, rose 2.17 percent to finish at 333,000 won.

The local currency ended at 1,198.1 won against the greenback, up 2.5 won from the previous session's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys added 2.6 basis points to 1.665 percent, and the return on the benchmark five-year government bonds rose 3.3 basis points to 1.813 percent. (Yonhap)