The benchmark KOSPI closed at 6,690.62, down 5.72 percent, and the junior KOSDAQ fell 5.32 percent, to 748.22, as foreign and institutional investors accelerated selling despite heavy buying by retail investors.
The plunge followed another weak session on Wall Street overnight, where technology shares came under pressure and rising oil prices added to concerns over the global inflation outlook.
Samsung Electronics and SK hynix bore the brunt of the selloff as foreign investors rapidly unwound positions in the two semiconductor heavyweights.
Samsung Electronics tumbled 7.59 percent to 249,500 won, while SK hynix dropped 8.34 percent to 1,759,000 won. Foreign investors dumped a net 1.76 trillion won worth of SK hynix shares and 873 billion won of Samsung Electronics, while institutions also emerged as the largest sellers of both companies, offloading 867.3 billion won and 858.8 billion won, respectively.
The SK Group was also in focus after the Seoul High Court largely upheld its revised divorce ruling ordering Chairman Chey Tae-won to pay former wife Roh Soh-yeong 944 billion won in the property settlement. SK Square fell 9.17 percent amid the broader market selloff.
Selling spread across other large-cap technology and cyclical names. Samsung Electronics preferred shares lost 7.33 percent to 177,100 won, Samsung Electro-Mechanics fell 8.43 percent to 1,326,000 won, Hyundai Motor declined 7.18 percent to 401,000 won, and LG Energy Solution slipped 5.32 percent to 329,500 won.
Financial shares also weakened, with Samsung Life Insurance falling 3.49 percent and KB Financial losing 2.72 percent, while Samsung C&T declined 5.00 percent. Among industrials, HD Hyundai Heavy Industries dropped 2.51 percent, and Kia slumped 12.88 percent, making it one of the day's biggest losers among blue chips.
Defensive buying was limited. Samsung Biologics climbed 10.08 percent to 1,518,000 won, while Hanwha Aerospace gained 2.19 percent and Shinhan Financial edged up 0.58 percent.
The weakness was equally pronounced on the junior KOSDAQ market. Among heavyweights, HLB was the lone gainer, rising 4.33 percent to 31,300 won. Biotechnology company Alteogen slipped 1.96 percent to 300,500 won, while battery materials makers EcoPro and EcoPro BM fell 7.35 percent and 8.38 percent, respectively.
Drug developer LegoChem Biosciences tumbled 17.62 percent, semiconductor equipment makers Jusung Engineering and PSK dropped 13.97 percent and 8.34 percent, respectively, while semiconductor equipment supplier Wonik IPS lost 11.30 percent. Precision parts maker Leeno Industrial declined 7.71 percent and biotech firm ABL Bio edged down 2.56 percent.
The Korean won, however, was broadly steady, with the dollar trading at 1,464.50 won, compared with 1,466.8 won in the previous session.
The market rout came as investors grappled with a deteriorating macroeconomic outlook. Brent crude climbed back toward $100 a barrel and the yield on the benchmark U.S. 10-year Treasury note rose above 4.7 percent, reinforcing concerns that higher energy prices could keep inflation elevated and delay monetary easing.
Adding to the cautious mood, Alphabet shares fell 6.89 percent after the company unveiled a sharply higher AI spending plan despite beating quarterly revenue estimates.
The selloff was mirrored across regional markets. Japan's Nikkei 225 dropped 2.79 percent to 64,572.00, Hong Kong's Hang Seng Index declined 1.16 percent to 24,919.50 and China's Shanghai Composite fell 1.61 percent to 3,814.20.
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