Seoul: South Korean stocks traded lower late Tuesday morning, led by a decline in chip and other tech shares, as investor sentiment weakened amid diminishing expectations for a Federal Reserve rate cut. The benchmark Korea Composite Stock Price Index (KOSPI) lost 79.6 points, or 1.95 percent, to 4,009.65 as of 11:20 a.m.

According to Yonhap News Agency, the index had opened lower, tracking overnight losses on Wall Street, and further extended losses on institutional and foreign selling. Investors are closely watching the Fed's policy trajectory as officials have delivered mixed signals. Fed Vice Chair Philip Jefferson cautioned that policymakers need to proceed slowly, even as he sees risks to the labor market as skewed to the downside.

In Seoul, tech shares lost ground, weighing on the index after their marked increase in the previous session. Market bellwether Samsung Electronics went down 1.69 percent, and chip giant SK hynix sank 4.13 percent. Leading battery maker LG Energy Solution dived 3.02 percent, and LG Chem shed 0.62 percent. Nuclear power plant builder Doosan Enerbility lost 0.89 percent.

Automakers drifted lower. Top automaker Hyundai Motor fell 0.02 percent, and its sister affiliate Kia retreated 1.36 percent. Leading financial group KB Financial skidded 3.08 percent, while internet portal operator Naver shed 0.78 percent.

But shipbuilders gathered ground. Leading shipbuilder HD Hyundai Heavy advanced 2.65 percent, and its rival Hanwha Ocean rose 0.61 percent. The state-run utility firm KEPCO surged 2.84 percent.

The local currency was trading at 1,466.65 won against the U.S. dollar at 11:20 a.m., down 8.65 won from the previous session.