Global Market: South Korean stocks pare gains as investors turn cautious ahead of Chuseok break

South Korean shares gave up most of their early gains on Wednesday as investors turned cautious ahead of a two-day market holiday, even as strong overnight performance by US technology stocks supported chipmakers.

The benchmark KOSPI was up 11.26 points, or 0.16%, at 7,029.17 as of 0214 GMT, according to Reuters. The index had gained nearly 2% earlier in the session.

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The Nasdaq closed at a record high on Tuesday, supported by gains in Micron Technology and other artificial intelligence-related stocks. The S&P 500 also remained close to a record high, while oil prices traded around $100 a barrel.

South Korean financial markets will remain closed on Thursday and Friday for the Chuseok holidays.

According to Reuters, investors were also assessing developments in South Korea-US relations after South Korean President Lee Jae Myung and US President Donald Trump met on the sidelines of the UN General Assembly. Seoul's presidential office said the two leaders welcomed significant progress in discussions on strategic investment projects.

Chipmakers led some of the gains in Seoul. Samsung Electronics rose 1.90%, while SK Hynix gained 0.11%, after both stocks had risen sharply earlier in the session following an overnight rally in their US peers.

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Other major stocks were mixed. LG Energy Solution advanced 0.29%, while Hyundai Motor and Kia Corp fell 1.94% and 1.86%, respectively. POSCO Holdings declined 1.89%, while Samsung BioLogics slipped 0.93%.

Market breadth remained weak, with 566 stocks declining compared with 292 gainers among 910 traded issues. Foreign investors were net sellers of shares worth 188.1 billion won ($139.14 million), according to Reuters.

The South Korean won strengthened 0.41% to 1,351.0 per dollar on the onshore settlement platform, compared with the previous close of 1,356.5.

In the bond market, December futures on three-year Treasury bonds gained 0.08 point to 102.37. The most liquid three-year Korean Treasury bond yield rose 0.8 basis point to 4.016%, while the benchmark 10-year yield fell 5.5 basis points to 4.409%.

The mixed market performance reflected a cautious tone ahead of the holiday break, despite continued strength in US technology stocks and the resulting support for South Korean chipmakers.

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