The benchmark KOSPI fell 1.5 percent to 5,564.34 as of around 10:45 a.m., after trading between 5,546.89 and 5,828.13.
Foreign investors sold a net 695 billion won worth of shares, while retail investors bought 372.2 billion won ($277 Million) and institutions followed with purchase of 196.9 billion won.
The index had opened higher, briefly climbing above 5,800, supported by gains in U.S. semiconductor stocks overnight. But the rally faded as early results from the U.S. midterm elections raised questions over the future direction of technology and AI infrastructure policies.
Democrats were making gains in key congressional races, raising the possibility of the party taking control of both chambers of Congress. Such an outcome could complicate President Donald Trump's legislative agenda and potentially lead to tighter oversight of AI data center development.
However, the final balance of power remained uncertain as vote counting continued.
U.S. stock futures weakened as the results emerged, with Nasdaq 100 futures falling nearly 1.5 percent during early Asian trading.
The reversal contrasted with Tuesday's Wall Street session, when the Nasdaq Composite gained 0.83 percent and the Philadelphia Semiconductor Index jumped 2.64 percent, ending a three-session losing streak.
Nvidia advanced 2.29 percent, Micron Technology rose 2.58 percent and AMD gained 3.65 percent, helping South Korean chipmakers open higher Wednesday.
SK hynix subsequently fell 3.65 percent to 1,347,000 won, while Samsung Electronics dropped 1.82 percent to 215,500 won.
SK Square, a major shareholder in SK hynix, declined 2.56 percent to 876,000 won, while Samsung Electro-Mechanics slipped 2.62 percent to 1,076,000 won.
Samsung Electronics' preferred shares lost 0.87 percent to 170,100 won.
Battery makers also remained under pressure, with Samsung SDI falling 2.46 percent to 476,500 won.
LG Energy Solution dropped 5.7 percent to 318,750 won in earlier trading, following downward revisions to earnings expectations amid concerns that improvements in energy storage system profitability could take longer than anticipated.
LX Semicon plunged 16.08 percent to 25,050 won after reporting a third-quarter operating loss of 15.56 billion won, reversing a profit of 14.03 billion won a year earlier.
The display chipmaker's revenue fell 14.8 percent to 336 billion won, reflecting weaker demand and continued pressure on profitability.
Despite the broader decline, several stocks posted gains.
Hanjin KAL rose 6.1 percent to 185,800 won, extending Tuesday's surge amid speculation over a potential ownership battle involving Chairman Cho Won-tae and Hoban Group.
The holding company's preferred shares jumped 21.7 percent to 47,200 won.
Game publisher Krafton surged 11.1 percent to 202,000 won, helping lift the gaming sector by 3.5 percent.
NCSoft gained 0.9 percent to 196,800 won, while Kakao Games moved in the opposite direction, falling 3.1 percent to 11,630 won.
Telecommunications shares also outperformed, with SK Telecom rising 2.7 percent to 76,300 won, LG Uplus gaining 3.5 percent to 14,980 won and KT advancing 2.1 percent to 48,550 won.
Elsewhere on the KOSPI, Hanjin Heavy Industries & Construction Holdings gained 5.71 percent to 185,200 won, while Samsung E&A rose 4.22 percent to 64,200 won.
The tech-heavy KOSDAQ fell 2.1 percent to 689.85, after trading between 688.90 and 718.34.
Foreign investors sold 24.6 billion won worth of shares, as institutions unloaded 24.4 billion won. Retail investors bought 70.1 billion won.
Biotechnology and semiconductor-related stocks came under pressure.
Alteogen dropped 8.43 percent to 195,500 won, while Wonik Holdings fell 5.26 percent to 30,650 won.
Goyoung declined 8.97 percent to 24,350 won, while ISPF No. 1 slipped 0.8 percent to 1,984 won.
By contrast, Simtech surged 7.84 percent to 121,100 won, while Jusung Engineering gained 1.1 percent to 156,800 won.
Elice rose 8.42 percent to 61,800 won, while Revolup edged up 0.77 percent to 14,330 won.
AST jumped 16.85 percent to 14,490 won, making it one of the strongest performers among actively traded KOSDAQ shares.
Throughout the Asian market, Japan's Nikkei 225 fell 3 percent to 61,183.06, while Hong Kong's Hang Seng Index slipped 0.3 percent to 23,471.85. China's Shanghai Composite declined 0.2 percent to 3,601.4.
The South Korean won strengthened 0.6 percent to 1,338.30 won per dollar.
Oil prices edged lower as investors weighed uncertainty surrounding U.S.-Iran peace negotiations against signs of recovering Middle Eastern crude exports.
West Texas Intermediate crude fell 0.5 percent to $95.64 a barrel, while Brent crude slipped 0.2 percent to $103.40.
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