The benchmark KOSPI closed at 6,803.90, down 1.98 percent from the previous session. The index opened 1.11 percent lower at 6,864.25 and briefly reversed into positive territory in morning trading before renewed selling pushed it back toward the 6,800 level.
Foreign investors sold a net 2.60 trillion won ($1.94 billion) of KOSPI shares, while institutions unloaded 674.6 billion won. Retail investors bought a net 2.56 trillion won, absorbing much of the selling. Decliners outnumbered advancers 527 to 333.
The weakness was concentrated in large technology stocks, with Samsung Electronics and SK hynix extending their declines for a second straight session.
Both chipmakers gave up early gains as selling intensified through the session. Samsung Electronics briefly climbed 2.76 percent in morning trading before reversing to close the regular session 1.29 percent lower at 268,500 won, a day before its preliminary third-quarter earnings announcement. SK hynix also briefly moved into positive territory before falling 2.82 percent to 1,723,000 won.
In KRX after-market trading as of around 4:30 p.m., Samsung Electronics rose to 270,500 won, narrowing its decline from the previous day to 0.55 percent, while SK hynix climbed to 1,726,000 won, leaving it down 2.65 percent.
The declines came despite a positive overnight lead from Wall Street, where gains in AI infrastructure shares and lower Treasury yields lifted the major indexes. The S&P 500 rose 0.58 percent to 7,818.93 and the Nasdaq Composite gained 0.45 percent to a record 27,599.79, while the Dow Jones Industrial Average advanced 0.49 percent to 51,521.28.
The strength did not extend across the U.S. semiconductor sector, however. Memory-related shares lagged, with Micron Technology falling 1.73 percent and SanDisk dropping 2.56 percent, limiting the positive spillover into Seoul.
Treasury yields also remained high. The U.S. 10-year yield, which had retreated to around 5.28 percent Tuesday after reaching 5.349 percent earlier in the week, climbed back to around 5.31 percent Wednesday.
Samsung's earnings remained the main near-term focus for chip shares. Analysts expect third-quarter profit to rise sharply on strong AI-related memory demand and tight supply, but forecasts have been trimmed as memory price gains slow and the stronger won weighs on overseas earnings. Investors are also watching whether memory-chip margins can remain resilient, making Thursday's preliminary results an important test of the current chip cycle.
Samsung also lost a source of steady buying support after completing a large share repurchase for employee compensation on Tuesday. The end of the program meant the company was no longer providing the regular buying that had helped support its shares in recent weeks, leaving the stock more exposed to market selling.
Samsung shares could face another source of volatility Thursday. Goldman Sachs said seven semiconductor exchange-traded funds with about 19 trillion won ($14 billion) in combined assets are scheduled to rebalance their portfolios on the same day as the earnings release. Because Samsung's weighting in some of the funds is near their limits, the ETFs may have to sell some Samsung shares automatically. Some of that money could instead move into other chip-related stocks, including SK hynix, SK Square and semiconductor equipment makers.
The earnings caution spread beyond semiconductors. LG Electronics plunged 10.54 percent to 208,000 won after estimating third-quarter operating profit at 781.8 billion won, below market expectations despite a 13.5 percent increase from a year earlier. Hyundai Motor fell 3.45 percent, while Samsung Electro-Mechanics dropped 4.24 percent to close at 1,604,000 won.
Samsung Electro-Mechanics later pared part of its decline in KRX after-market trading, rising to 1,614,000 won and leaving it down 3.64 percent from the previous day. SK Square was down 1.46 percent at 1,144,000 won, while LG Energy Solution gained 0.26 percent to 391,000 won.
The KOSDAQ suffered an even steeper decline, falling 2.34 percent to 898.43. The junior index had opened at 917.45 before losses widened through the session.
Retail investors bought a net 502.9 billion won of KOSDAQ shares, while foreign investors sold 259.6 billion won and institutions unloaded 217.0 billion won, according to KRX data.
Selling was broad across major KOSDAQ stocks in after-market trading as of 5:27 p.m. Alteogen, a biotechnology company developing platform technologies for biologic drugs, fell 2.12 percent to 254,500 won. EcoPro, the holding company of a battery-materials group, dropped 3.67 percent to 91,900 won, while cathode-material producer EcoPro BM lost 2.87 percent to 125,200 won.
Jusung Engineering, which makes deposition equipment used in semiconductor production, slid 8.98 percent to 253,500 won.
Rainbow Robotics, a developer of collaborative, mobile and humanoid-based robot platforms, fell 3.97 percent to 447,500 won. Simmtech, a supplier of semiconductor package substrates, declined 2.23 percent to 171,100 won. Leeno Industrial, which makes semiconductor test probes and IC test sockets, slipped 1.27 percent to 85,800 won, while semiconductor equipment maker Wonik IPS dropped 6.16 percent to 132,600 won.
Nevertheless, the Korean won strengthened to 1,338.60 won per dollar from 1,343.6 won in the previous session.
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