South Korea's KOSPI on Sept. 14 slumped more than 3 percent on heavy selling by foreign investors and institutions, falling below the 6,700 level. Large semiconductor stocks such as Samsung Electronics and SK Hynix dropped sharply, dragging the index down.

The KOSPI closed down 225.54 points, or 3.26 percent, at 6,684.37. It opened down 217.30 points, or 3.14 percent, at 6,692.61. It trimmed losses to the 6,700 level during the session but slid again as selling emerged.

The KOSPI, which had regained the 7,000 level based on the Sept. 9 close, has since fallen for two consecutive sessions to the 6,600 level. After dropping below 7,000 at 6,909.91 on Sept. 11, the decline widened further on the day.

In the main stock market, foreigners net sold 3.2875 trillion won and institutions net sold 1.1715 trillion won. Their combined net selling reached 4.4590 trillion won. Retail investors net bought 2.9722 trillion won, absorbing the supply.

Among the top market-cap stocks, semiconductor shares posted the biggest declines. Samsung Electronics closed down 4.05 percent at 249,000 won and SK Hynix fell 6.35 percent to 1,697,000 won.

SK Square fell 8.17 percent, Samsung Electro-Mechanics dropped 4.50 percent, LG Energy Solution slid 2.36 percent, Hyundai Motor lost 2.88 percent and Samsung Life fell 3.09 percent.

Samsung Biologics rose 0.35 percent to 1.42 million won and KB Financial Group gained 2.08 percent to 181,600 won.

The KOSDAQ also fell. It closed down 13.85 points, or 1.69 percent, at 806.79.

In the Seoul foreign exchange market, the won was at 1,346.70 per dollar, up 2.90 won, or 0.22 percent, from the previous session.

The KOSPI has recently swung around the 7,000 level, and volatility widened again on the day as foreign selling concentrated on large semiconductor stocks. The index, which had been testing whether it could settle above 7,000, slid to the 6,600 level in just a few days, underscoring growing short-term correction pressure.

Han Ji-young (한지영), an analyst at Kiwoom Securities, said support near the 7,000 level and whether foreigners resume net buying are becoming important in the domestic stock market. She said foreigners will be the key force in supply and demand that can determine the market's direction.

She added that whether foreigners resume net buying in the process of digesting the U.S. Federal Open Market Committee event in September will be a condition for the index to settle above 7,000.