SEOUL - South Korean shares recovered from sharp intraday falls to close 0.8 percent higher Monday, bucking the regional trend after the central bank announced its largest-ever rate cut.

The KOSPI index ended up 7.70 points at 946.45, ending a four-day losing streak. Volume was 531.3 million shares worth 5.74 trillion won (S$5.99 billion), with losers outpacing gainers 713 to 163.

"Investors seemed to take some comfort with the central bank's market stabilisation measures including a sharp rate cut," said Park Seok-Hyun, an analyst at Eugene Investment and Securities.

The Bank of Korea earlier announced that it had cut its key interest rate by 0.75 percentage point to 4.25 percent and planned to buy up to 10 trillion won worth of bonds issued by local lenders. The market was highly volatile throughout the day, with steep losses in earlier trading forcing the Korea Exchange to suspend programme trading for five minutes.

Tech and steel shares drove the last-minute rebound. Industry leader Samsung Electronics surged 7.48 percent to 438,000 won, while second-ranked LG Electronics jumped 6.52 percent.

Top steelmaker POSCO ended up 8.68 percent at 263,000 won.

Banks were among the sharp gainers. Shinhan Financial Group rose 5.42 percent to 36,000 won and Woori Finance Holdings advanced 11.6 percent to 7,600.

Auto companies joined the upward move, with leading carmaker Hyundai Motor closing up 10.49 percent at 51,600 won.

Shipbuilders and brokerage companies, however, weighed on the market. Number two shipyard Samsung Heavy Industries fell 14.75 percent to 11,850 won and Samsung Securities lost 5.11 percent to 52,000.

The won fell further following the rate cut. It ended at 1,442.5 won to the dollar, down 18.5 from Friday's close.