South Korean stocks closed slightly higher Thursday as investors hunted bargains following a recent market decline triggered by diminished hope for the US Federal Reserve's rate cut. The Korean won gained against the US dollar.

The benchmark Korea Composite Stock Price Index climbed 4.14 points, or 0.17 percent, to 2,440.04.

Trading volume was moderate at 555 million shares worth 8.12 trillion won ($6 billion), with losers outpacing gainers 444 to 421.

Foreigners dumped shares worth 130.5 billion won, while retail investors bought a net 118.3 billion won. Institutions offloaded a net 16.6 billion won.

The rebound came after the index plunged 2.47 percent the previous day driven by uncertainties surrounding the timing of the Federal Reserve's rate cut.

"The hope over the Federal Reserve's policy shift is set to be adjusted for the time being, but it is not likely to cause a market freeze," Han Ji-young, an analyst from Kiwoom Securities, said.

Han added that investors are expected to sit on the sidelines with the index hovering around the current level.

In Seoul, top tech giant Samsung Electronics moved up 0.99 percent to 71,700 won, and No. 2 chipmaker SK hynix increased 3.97 percent to 136,200 won.

South Korea's budget airline Jin Air gained 6.03 percent to 13,550 won after the company reported record earnings in 2023 on strong post-pandemic demand.

Samsung Publishing, a major shareholder of The Pinkfong Company known for the "Baby Shark" franchise, shot up 3.1 percent to 21,650 won after the ruling and opposition parties announced campaign pledges to address falling birth rates. The company is not affiliated with Samsung Group.

Battery makers, on the other hand, traded weaker amid the growing concerns over the global electric vehicle market, with Samsung SDI falling 0.66 percent to 376,500 won.

The local currency ended at 1,339.7 won against the greenback, up 4.5 won from the previous session's close. (Yonhap)