Seoul: South Korean shares sank by more than 2 percent, halting a four-day winning streak due to significant foreign sell-offs. The Korean won also lost ground against the U.S. dollar.

According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) fell 100.13 points, or 2.37 percent, closing at 4,121.74, dipping below the 4,200 mark just a day after surpassing it.

Trade volume was substantial with 421.1 million shares worth 20.7 trillion won (US$14.4 billion) exchanging hands, as losers outnumbered winners by 504 to 380. Foreign and institutional investors sold local shares worth 2.2 trillion won and 498.5 billion won, respectively, for profit-taking, while retail investors continued their buying spree, net purchasing 2.7 trillion won.

Overnight in the U.S., the tech-heavy Nasdaq composite gained 0.46 percent, while the S and P 500 added 0.17 percent. The Dow Jones Industrial Average, however, fell 0.47 percent. Amazon Web Services surged 4 percent after a multiyear $38 billion deal with OpenAI, and Nvidia rose 2.17 percent following the U.S. administration's approval to export chips for Microsoft's data centers in the UAE.

Lee Kyoung-min, an analyst at Daishin Securities, noted, "The KOSPI is now taking a breather after the recent surges driven by expectations surrounding the APEC gathering last week." He added that shares leading the recent bull run, such as Samsung Electronics and SK hynix, along with those benefiting from Korea's tariff deal with the United States, like automakers and shipbuilders, lost ground.

Samsung Electronics dropped 3.51 percent to 107,200 won, and SK hynix plunged 5.48 percent to 586,000 won, both retreating from record highs reached on Monday. Major shipbuilders like HD Hyundai Heavy, Hanwha Ocean, and HD Korea Shipbuilding also saw declines.

In the defense sector, Hanwha Aerospace fell 3.07 percent to 1.01 million won, and Naver, an Internet portal operator, decreased by 2.37 percent to 268,000 won. Hyundai Motor and Kia, key players in the automotive industry, saw significant drops as well.

Financial shares were among the few gainers, with KB Financial and Shinhan Financial posting increases. The local currency was quoted at 1,437.9 won against the greenback, sliding 9.1 won from the previous session.