Seoul shares fell 1 percent on Tuesday, their biggest fall in one month, as worries a recent record-setting rally had come too quickly led investors to lock in gains in outperformers such as Hyundai Heavy Industries.
The fears were sparked partly by falling Chinese markets, with the Shanghai stock index down 3.4 percent as of 0641 GMT on worries that regulators would take steps to cool its red-hot market.
That brought flashbacks of late February for some investors, when a tumble in Chinese shares led to a global sell-off that spread to markets from New York to London. Shipbuilders were among the biggest losers on Tuesday, with Hyundai Heavy, the world's biggest, sinking 4.76 percent to 260,000 won after shares had more than doubled this year to record highs.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 1.02 percent to end at 1,589.37 points, retreating from a record close of 1,605.77 hit on Monday. It was the index's biggest one-day percentage fall since dropping 1.36 percent on April 19, and its first losing session in five.
The KOSPI had surged 10.5 percent since the beginning of April as of Monday's close, hitting a string of records along the way, lifted by rising optimism about the domestic economy and corporate earnings, as well as stronger global markets.
Samsung Securities Co dropped 2.99 percent to 55,100 won. Oil refiner SK Corp dropped 4.59 percent to 104,000 won. LG.Philips LCD Co Ltd slumped 3.04 percent to 38,250 won. Hyundai Motor Co, another recent underperformer, rose 0.62 percent to 65,000 won.