South Korean shares closed higher on Wednesday as investors derived optimism from gains in US stocks on Tuesday, in the aftermath of a delay in the imposition of a 25% tariff on Canadian and Mexican imports and a 10% levy on Chinese goods by the Trump administration.

The Korea Composite Stock Price Index, or Kospi, was up by 27.58 points, or 1.11%, to close at 2,509.27. The Kosdaq also increased by 11.06 points, or 1.54%, to end at 730.98.

In economic news, South Korea's foreign reserves contracted to $411 billion in January from $415.6 billion as of the end of December, the Bank of Korea said Wednesday.

The country's official forex reserves consisted of securities amounting to $362 billion, deposits of $25.3 billion, special drawing rights of $14.7 billion, gold worth $4.8 billion, and the country's IMF position at $4.2 billion.

South Korea's forex reserve holdings ranked ninth largest globally as of the end of December, the central bank said.

In corporate news, Hyundai Motor (KRX:005380) and Kia (KRX:000270) entered into a strategic partnership with Kolon's (KRX:002020) wholly-owned Kolon Spaceworks, investing 20 billion won to acquire a combined 11% stake to become its second-largest shareholder.

The partnership will focus on developing advanced materials for hydrogen storage containers, battery covers, and addressing environmental regulations such as the EU's end-of-life vehicles (ELV) directive.

Shares of Hyundai Motor rose nearly 2% at market close on Wednesday while those of Kia increased over 1%. Shares of Kolon rose over 7% at market close.