Seoul: South Korean stocks experienced a significant decline late Thursday morning as investors withdrew from large-cap tech shares following a period of gains in earlier sessions. After an initial drop of 1.81 percent, the benchmark Korea Composite Stock Price Index (KOSPI) continued its downward trajectory, falling 298.38 points, or 4.52 percent, to reach 6,299.88 by 11:20 a.m.

According to Yonhap News Agency, the index had previously risen by 1.62 percent and 3.76 percent on Tuesday and Wednesday, respectively, spurred by reduced concerns over the profitability of artificial intelligence ventures. In response to the sharp decline, the Korea Exchange (KRX) implemented a sell-side sidecar for the KOSPI at 10:18 a.m., pausing program trading for KOSPI-listed shares for a brief five-minute period.

The slump in Seoul mirrors an overnight decline on Wall Street, where the Nasdaq Composite, a tech-centric index, fell by 0.83 percent, marking its first drop in five sessions. Major tech companies, including Alphabet and Advanced Micro Devices, saw their stocks decrease. Conversely, the Dow Jones Industrial Average prolonged its winning streak following reports that Iran and Oman reached an agreement on a maritime route through the Strait of Hormuz.

In the South Korean market, tech shares were at the forefront of the downturn. Samsung Electronics, a major player, dropped by 5.89 percent, while its competitor, SK hynix, fell by 8.75 percent. Samsung Electro-Mechanics, an affiliate specializing in electronic components, saw a 9.11 percent decrease, and SK Square, the parent company of SK hynix, declined by 11.62 percent. Additionally, Hyundai Motor, a leading car manufacturer, decreased by 2.35 percent, and energy firm Doosan Enerbility saw a 1.69 percent decline.

Despite the overall market trend, some companies recorded gains. Hanwha Aerospace, a defense company, rose by 4.17 percent, and cosmetics manufacturer APR increased by 4.34 percent, buoyed by robust second-quarter earnings. The Korean won was trading at 1,416.25 won against the U.S. dollar as of 11:20 a.m., reflecting an increase of 8.65 won from the previous day's stock market close.