South Korean shares closed lower on Friday, mirroring losses across the region, as investors booked profits, selling off defense and other key stocks.

Investor worries somewhat appeared to ease after trade minister Yeo Han-koo said that South Korea will be treated as a "favored nation" by the US when it comes to chip exports, under a bilateral tariff deal. Yeo also said that Korean companies will not face 100% duties as announced by US President Donald Trump.

The Korea Composite Stock Price Index or Kospi declined 17.67 points, or 0.6%, to end at 3,210.01. The Kosdaq increased by 3.46 points, or 0.4%, to close at 809.27.

"If the U.S. semiconductor tariff rate for MFNs is set at 15 percent, South Korea will also enjoy 15 percent tariffs regardless of the rate going up to 100 percent or 200 percent," Yeo said at a radio interview with broadcaster SBS on Thursday.

In corporate news, GS Retail (KRX:007070) posted second-quarter net income attributable to shareholders of 15.3 billion won, down 74% from 59.7 billion won a year earlier, according to a Friday filing with the Korea Exchange.

The retailer's sales increased 1.7% year over year to 2.980 trillion won from 2.930 trillion won.

Shares of GS Retail rose nearly 5% at market close.

In other news, Naver (KRX:035420) posted second-quarter net income attributable to shareholders of 488.8 billion won, up 44% from 338.4 billion won a year earlier.

The South Korean internet conglomerate's sales jumped 12% year over year to 2.915 trillion won from 2.611 trillion won.

Shares of Naver fell nearly 3% at market close.