Investors also appeared cautious ahead of earnings reports from five major tech companies, collectively dubbed the "magnificent seven," including Alphabet, Amazon, Apple, Meta, and Microsoft this week.
The main index fell 0.43 percent to 6,612.20 shortly after trading began. Foreign investors sold a net 436.4 billion won, outweighing buying by retail and institutional investors.
Heavyweight semiconductor shares such as Samsung Electronics and SK Hynix came under pressure, tracking weakness in U.S. technology stocks. Samsung Electronics fell 0.90 percent to 220,000 won, while SK Hynix slipped 0.31 percent to 1,296,000 won.
Sentiment had initially been dampened after U.S. equities retreated overnight, with technology shares leading losses amid renewed concerns over elevated valuations tied to the AI boom. The S&P 500 fell 0.49 percent to 7,138.80 and the Nasdaq Composite dropped 0.90 percent to 24,663.80.
Among other large caps, Samsung Biologics slipped 1.20 percent to 1,486,000 won, and Hyundai Motor fell 1.08 percent to 549,000 won. LG Energy Solution also declined 1.06 percent to 467,000 won.
Gains were led by defense and industrial shares, with Hanwha Aerospace rising 1.79 percent to 1,420,000 won and HD Hyundai Heavy Industries jumping 3.15 percent to 688,000 won. Samsung SDI climbed 2.50 percent to 697,000 won, while SK Square edged up 0.37 percent to 814,000 won.
Power equipment shares also remained firm, with Hyosung Heavy Industries adding 0.20 percent to 3,984,000 won.
The junior KOSDAQ stocks were also mostly lower, led by Juseong Engineering, which tumbled 7.13 percent to 121,200 won, and LigaChem Biosciences, down 3.83 percent to 195,700 won. Ecopro fell 2.79 percent to 157,000 won, and Alteogen slipped 1.33 percent to 381,500 won. Rainbow Robotics dropped 1.65 percent to 657,000 won, and Ecopro BM lost 1.41 percent to 210,500 won.
Among others, Leeno Industrial fell 1.97 percent to 109,200 won, EO Technics dropped 1.95 percent to 503,000 won, Wonik IPS shed 2.06 percent to 118,600 won, and Caregen slipped 1.31 percent to 105,600 won.
Gainers were limited, with Alteogen rising 1.33 percent to 381,500 won and ABL Bio edging up 0.14 percent to 139,600 won.
The South Korean won strengthened slightly to 1,472.50 per dollar from 1,473.60 previously.
Elsewhere in Asia, Hong Kong's Hang Seng Index rose 0.63 percent to 25,842.63, while China's Shanghai Composite fell 0.41 percent to 4,061.82. Japan's Nikkei 225 was closed on Wednesday for Showa Day, a Japanese public holiday honoring former Emperor Hirohito, while markets in South Korea, China, Hong Kong, and Taiwan will be closed on Friday for Labor Day.
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