South Korean stocks traded markedly higher late on Wednesday morning, driven by gains in big-cap tech shares, as investors cautiously pinned hopes for progress in negotiations between the United States and Iran to end the ongoing conflict.

The benchmark Korea Composite Stock Price Index (KOSPI) rose 126.14 points, or 2.27 percent, to 5,680.06 as of 11:20 a.m.

The index opened sharply higher and maintained its upward momentum on strong buying by institutional and foreign investors, reports Yonhap news agency.

US President Donald Trump said that Iran has offered the U.S. a "very significant prize" related to oil and gas, adding that negotiations are under way to end the monthlong war in the Middle East.

But Tehran denied claims that it has been in contact with the U.S., according to foreign media reports.

Most large-cap shares gathered ground.

Market bellwether Samsung Electronics rose 2.06 percent, while chip giant SK hynix surged 3.85 percent.

Top automaker Hyundai Motor advanced 2.24 percent, and its sister affiliate Kia climbed 1.52 percent.

Pharmaceutical giant Samsung Biologics went up 1.87 percent, and defense giant Hanwha Aerospace jumped 2.02 percent.

Nuclear power plant builder Doosan Enerbility soared 3 percent, and leading financial group KB Financial added 2.25 percent.

Samsung Life Insurance increased 2.25 percent, and Mirae Asset Securities spiked 5.24 percent.

But leading battery maker LG Energy Solution fell 0.64 percent, while major shipbuilder HD Hyundai Heavy shed 0.58 percent.

The Korean won was trading at 1,494.4 won against the U.S. dollar as of 11:20 a.m., up 0.8 won from the previous session.

Meanwhile, South Korea and Canada on Wednesday discussed joint efforts to address global supply chain disruptions and other shared issues, including Seoul's bid for a multibillion-dollar Canadian patrol submarine project, officials said.

The discussions took place during their "two plus two" working-level talks between foreign and industry officials as the two countries step up efforts to strengthen their partnership amid growing supply chain bottlenecks and other geopolitical challenges.