The KOSPI shed 215.99 points to 6,696.96.
Foreign investors sold a net 3.68 trillion won ($2.66 billion) and institutions sold 1.29 trillion won ($936 million), while individuals bought 3.32 trillion won ($2.40 billion).
Samsung Electronics fell 8.7 percent to 257,000 won ($186.03), its sharpest drop among the market's biggest stocks, after the company announced a shareholder-return plan worth up to 110 trillion won ($79.62 billion) for 2026.
Investors had expected more aggressive share buybacks and cancellations, making the size of the plan less important to the market than how much of it would directly reduce the share count.
SK hynix fell 3.4 percent to 1.671 million won ($1,209.55), extending the weakness across Korea's semiconductor leaders.
The decline was concentrated in large caps rather than the broader market.
The KOSDAQ rose 11.39 points to 813.33, up 1.4 percent, as biotechnology and other smaller companies advanced even while the KOSPI was hit by heavy selling in technology stocks.
LG Energy Solution bucked the broader selloff, rising 5.4 percent to 362,000 won ($262.03).
The divergence also appeared across Northeast Asia.
In Tokyo, the Nikkei 225 fell 0.7 percent to 65,528.09, with Advantest among the biggest drags on the index, while Tokyo Electron rose and provided the largest positive contribution.
The Shanghai Composite fell 25.68 points to 3,879.52, down 0.7 percent, according to desk data.
Seoul's decline was therefore deeper than those in Tokyo and Shanghai, with the selling concentrated around the semiconductor-heavy companies that had led the Korean market's earlier gains.
Samsung's shareholder-return plan calls for 90 trillion to 110 trillion won ($65.15 billion-$79.62 billion) in returns this year, including about 30 trillion won in third-quarter cash dividends.
The reaction showed that investors were looking beyond the headline size of Samsung's payout and focusing instead on how much of the company's strong semiconductor cash flow would translate into direct support for the stock.
The Korean won traded at 1,381.50 per dollar, the highest since mid-September 2025.
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