South Korean shares finished a tad higher Wednesday as investors bet that the escalating tensions between two Koreas would have a limited impact on the financial markets. The Korean won fell against the US dollar.

After a choppy session, the benchmark Korea Composite Stock Price Index (KOSPI) rose 3.00 points, or 0.14 percent, to close at 2,141.05. Trading volume was high at about 915 million shares worth some 15.2 trillion won ($12.5 billion), with gainers outnumbering losers 495 to 356.

Foreigners sold a net 113 billion won, and institutions offloaded a net 81.6 billion won. Individuals bought a net 205 billion won.

Kim Yo-jong, the powerful sister of North Korean leader Kim Jong-un, on Wednesday ridiculed Moon's speech on inter-Korean relations, calling it "shameless sophistry." Moon's office struck back, saying that her "rude and senseless" rhetoric would not be tolerated.

The exchanges of strongly worded statements came a day after Pyongyang blew up the inter-Korean liaison office building, established in its border town of Kaesong in 2018, as a token of reconciliatory efforts.

"The North Korean issue may cause some disturbances that require caution, but the level of uncertainties seems to be limited," said Bookook Securities analyst Lee Won.

The stimulus policy moves by China and the United States are likely to have a stronger influence on the local stock markets, he added.

Large caps closed mixed.

Market bellwether Samsung Electronics climbed 0.19 percent to 52,200 won, and No. 2 chipmaker SK hynix gained 1.64 percent to 86,800 won.

Internet giant Naver advanced 3.08 percent to 251,000 won, while top automaker Hyundai Motor lost 0.99 percent to 100,500 won.

Top pharmaceutical firm Samsung Biologics fell 0.24 percent to 824,000 won, while leading chemical maker LG Chem added 0.82 percent to 491,500 won.

The local currency closed at 1,213.90 won against the US dollar, down 6.70 won from the previous session's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 1.4 basis points to 0.874 percent, and the return on the benchmark five-year government bond gained 1.6 basis points to 1.147 percent. (Yonhap)