As of 10:13 a.m., the benchmark KOSPI fell 0.87 percent to 7,208.53, while the tech-heavy KOSDAQ dropped 1.97 percent to 1,062.49 amid persistent foreign selling.
The Japanese Nikkei 225 also weakened as government bond yields climbed to fresh multi-decade highs, deepening concerns that elevated oil prices and stubborn inflation could keep global borrowing costs higher for longer.
The Korean won also came under pressure, with the U.S. dollar rising to 1,511.50 won from 1,507.80 won in the previous session.
The local market initially opened higher despite overnight losses on Wall Street, supported by rebounds in U.S. memory-chip stocks such as Micron and Sandisk following recent sharp declines.
Samsung Electronics, which was set to hold a third round of wage talks with its labor union at 10 a.m. ahead of a planned general strike Thursday, edged up 0.91 percent to 278,000 won. SK hynix, however, reversed early gains to fall 1.38 percent to 1,721,000 won.
Among other large-cap shares, HD Hyundai Heavy Industries surged 4.52 percent to 625,000 won, while SK Square gained 0.49 percent to 1,025,000 won and Samsung SDI added 0.55 percent to 181,800 won.
Automakers and battery shares traded broadly lower. Hyundai Motor fell 1.99 percent to 592,000 won, Kia lost 2.39 percent to 151,200 won and LG Energy Solution slipped 1.37 percent to 394,500 won.
Defense and industrial shares also weakened, with Hanwha Aerospace dropping 3.34 percent to 1,243,000 won, Doosan Enerbility falling 3.11 percent to 102,700 won and Samsung Electro-Mechanics declining 2.63 percent to 961,000 won.
Financial and biotech shares mostly retreated as well. Samsung Life Insurance fell 2.24 percent to 305,000 won, Samsung Biologics dropped 2.30 percent to 1,315,000 won, Samsung C&T slid 3.02 percent to 369,000 won and KB Financial edged down 0.59 percent to 151,900 won.
On the KOSDAQ, AI robotics and other high-valuation growth shares came under pressure as rising global yields dampened investor appetite for risk assets. Rainbow Robotics tumbled 4.05 percent to 639,000 won, extending the broader selloff in AI and robotics-related names.
Secondary-battery and biotech shares also weakened. Alteogen fell 2.86 percent to 356,000 won, Ecopro dropped 2.63 percent to 118,400 won, Ecopro BM slipped 0.82 percent to 180,900 won and HLB declined 3.84 percent to 47,600 won. Samchundang Pharm plunged 7.80 percent to 337,000 won, while ABLBio lost 5.00 percent to 106,400 won and Kolon TissueGene fell 5.25 percent to 101,000 won.
Overnight, the yield on the benchmark 30-year U.S. Treasury bond climbed as high as 5.197 percent, the highest level since 2007, fueling concerns that prolonged geopolitical tensions and elevated oil prices could reignite inflationary pressures.
Japan's 10-year government bond yield also hit another fresh high, ending Tuesday at 2.793 percent, its highest level in nearly three decades.
Japan's Nikkei 225 fell 1.11 percent to 59,881.16, while Hong Kong's Hang Seng Index dropped 0.70 percent to 25,616.02 and China’s Shanghai Composite slipped 0.46 percent to 4,150.46.
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