South Korean shares closed higher on Tuesday, recovering from steep early losses, as investors turned their attention to a heavy slate of corporate earnings results due this week, including those from US chip giant Nvidia. The Korean won fell against the US dollar.

The benchmark Korea Composite Stock Price Index opened 2.4 percent lower before paring its losses to finish 45.78 points, or 0.68 percent, higher at 6,742.74. The rebound followed a previous session in which the index slid more than 3 percent as chipmakers tumbled amid renewed concerns over the profitability of artificial intelligence-related investments. Samsung Electronics and SK hynix rank among the heaviest weightings on the index, so swings in sentiment toward AI spending tend to move the broader market.

In Seoul, individuals purchased a net 1 trillion won ($723 million) and institutions a net 1.17 trillion won, while foreign investors, a major force in the Korean market, sold a net 3.82 trillion won.

Nvidia's results are a closely watched read on AI demand across the chip industry, and they carry particular weight in Seoul: SK hynix is a leading supplier of the high-bandwidth memory used in Nvidia's AI accelerators, and Samsung Electronics competes in the same market.

Overnight, US stocks closed mixed, with the Dow Jones Industrial Average rising 0.26 percent and the tech-heavy Nasdaq Composite falling 0.76 percent. Analysts said investors are weighing concerns over mounting geopolitical tensions in the Middle East against expectations for US economic data and corporate earnings due this week.

Federal Reserve Gov. Kevin Warsh is expected to speak at the annual Jackson Hole gathering in Wyoming on Friday, which could offer clues to the Fed's monetary policy outlook amid persistent inflation. The symposium, hosted by the Kansas City Fed, has often served as a platform for signals on US monetary policy, a key variable for the dollar and for capital flows to emerging markets such as South Korea.

Tech and auto stocks led the gains on the Seoul exchange. Market bellwether Samsung Electronics remained unchanged at 257,000 won, while its chipmaking rival SK hynix rose 0.42 percent to 1.68 million won. Top carmaker Hyundai Motor climbed 1.69 percent to 421,000 won, and leading shipbuilder HD Hyundai Heavy Industries gained 1.98 percent to 464,500 won.

Among decliners, leading battery maker LG Energy Solution fell 3.45 percent to 349,500 won, and leading refiner SK Innovation shed 3.92 percent to 125,000 won.

The Korean won was quoted at 1,386.1 against the US dollar as of 3:30 p.m., down 3.7 won from the close of the previous stock trading session. Currency swings carry broad stakes for Korea's export-driven economy: a weaker won can lift the local-currency value of exporters' overseas earnings while raising costs for importers, and South Korea relies heavily on imported energy. (Yonhap)