South Korea's KOSPI fell more than 4% on net selling by foreigners worth about 3 trillion won and sharp declines in heavyweight semiconductor stocks. The Kosdaq recouped its intraday losses to hold the 800 level.

On Thursday, the KOSPI closed down 301.88 points, or 4.58%, at 6,296.38. The index opened down 119.51 points, or 1.81%, at 6,478.75 and slid to the 6,200 level during the session as foreign selling intensified.

In the main board market, foreigners net sold 3.33 trillion won. Institutions also dumped 122.0 billion won. Retail investors net bought 3.34 trillion won, absorbing the foreign and institutional supply.

As losses widened in intraday trade, a sell-side sidecar was triggered in the main board market at 10:18:12 a.m.

At the time of the trigger, KOSPI 200 futures stood at 987.24, down 52.48 points, or 5.04%, from the reference price. Program sell orders were halted for 5 minutes. It marked a change in direction of the market safety device a day after a buy-side sidecar was triggered in the KOSPI.

The Kosdaq closed up 2.08 points, or 0.26%, at 801.67. It was weak in intraday trade but recouped losses in the afternoon to climb back above 800.

Samsung Electronics closed down 6.30% at 230,500 won, while SK Hynix finished down 10.37% at 1,495,000 won.

Elsewhere, SK Square fell 13.32% and Samsung Electro-Mechanics slid 9.37%. Hyundai Motor and Samsung Life Insurance also fell 1.11% and 2.21%, respectively.

By contrast, LG Energy Solution rose 2.83%, Samsung Biologics added 1.54% and KB Financial Group gained 0.47%.

Overnight, profit-taking focused on artificial intelligence and semiconductor stocks in the U.S. market also weighed on domestic chip shares. AMD tumbled 7.04%.

In the Seoul foreign exchange market, the won was at 1,423.80 per dollar, down 0.30 won from the previous session.

Han Ji-young (한지영), a researcher at Kiwoom Securities, said, "There may be aftershocks of expanding volatility for the time being, but I judge that the abnormal amplification of volatility seen during the July crash has passed its peak."