South Korean shares fell 1.4 percent in thin trade on Wednesday as record high oil prices hit prices for large caps and energy-sensitive shipping shares.
Dealers said moves were exaggerated by thin volumes.
Worries over the impact of stronger oil prices on corporate profits and the economy grew as NYMEX crude oil futures hit a record high of $42.45 a barrel on Wednesday in after-hours electronic trading. South Korea imports all of its crude oil.
The benchmark Korea Composite Stock Price Index (KOSPI) dipped to 797.68 during the day before regaining the key 800-point mark to close at 804.39 points, down 1.4 percent.
"Oil prices sky-rocketed, burdening a market that has recovered sharply recently and inciting foreigners to turn to net sellers after six sessions of net buying," said Jo Jae-hoon, an analyst at Daewoo Securities.
Trading volume of 258.2 million shares was the lowest since September 12, 2001, just after attacks on New York and Washington. Turnover was 1.80 trillion won.
"Program selling amount itself wasn't huge in fact, but the impact was great. Even a smattering of sell orders is enough to shake local markets as the low trading volume has increased volatility," said Kim Hyun, a fund manager at MyAsset Investment Management.
Shares in Samsung Electronics Co Ltd, the world's top memory chip maker, fell 2.5 percent to 502,000 won. Top lender Kookmin Bank fell 2.8 percent to 38,800 won.
On the upside, Hynix Semiconductor Inc rose 1.8 percent to 11,500 won as investors cheered a decision by creditors to accept an $820 million offer by an equity fund at Citigroup Inc to buy a specialised chip division.
Foreigners sold a net 92.1 billion won ($79.39 million) worth shares and local institutions shed a net 44.2 billion won.
The June KOSPI 200 futures index fell 2.20 points to 103.30. and the underlying KOSPI 200 spot index lost 1.68 points to 104.06.
Losers led gainers by 429 to 288, with 86 stocks unchanged.
The junior Kosdaq rose 0.48 percent to 407.83 points.