Seoul: South Korean stocks traded lower late Wednesday morning, led by a decline in big-cap tech shares, amid fears of an artificial intelligence (AI) bubble and diminishing expectations for a Federal Reserve rate cut. The benchmark Korea Composite Stock Price Index (KOSPI) lost 6.37 points, or 0.16 percent, to 3,947.25 as of 11:20 a.m.

According to Yonhap News Agency, the index opened lower, tracking overnight losses on Wall Street, but most of the losses were erased due to retail and institutional buying. There have been concerns about the valuation of AI-related shares, as some institutions have reduced their exposure following recent rallies. Investors are also focusing on Nvidia's quarterly earnings and its outlook for the sector. Eyes are also on the Fed's policy path amid mixed signals from its officials.

Market bellwether Samsung Electronics went down 1.12 percent, and chip giant SK hynix sank 1.4 percent. Leading battery maker LG Energy Solution fell 1.13 percent, and nuclear power plant builder Doosan Enerbility lost 0.8 percent. Shipbuilders lost ground. Leading shipbuilder HD Hyundai Heavy dipped 3.15 percent, and its rival Hanwha Ocean retreated 2.19 percent.

However, automakers rose, with top automaker Hyundai Motor rising 0.38 percent and its sister affiliate Kia advancing 1.31 percent. Defense giant Hanwha Aerospace climbed 1.3 percent, and leading financial group KB Financial added 0.57 percent. Internet portal operator Naver edged up 0.2 percent.

The local currency was trading at 1,464.45 won against the U.S. dollar at 11:20 a.m., up 0.85 won from the previous session.