Seoul's benchmark KOSPI index closed down 5.98% at 5,663.24 points, marking its lowest close since April 7.

The earnings report from memory chip manufacturer SK Hynix failed to stabilise the major index, as investors locked in profits from the sharp gains in share prices seen so far this year. The KOSPI index plunged as much as 8.2% in early trading, triggering a 20-minute trading halt, a common occurrence during periods of market volatility this year. The index fell more than 12% at one point during the session, dragged down by an acceleration in losses among chip stocks.

"Seoul will have to learn to coexist with stock market volatility," analysts at Eurasia Group noted in a research report. "However, these large daily swings often have little to do with market fundamentals; corporate profits remain at historically high levels."

SK Hynix reported that its quarterly operating profit more than quintupled, partly due to a 63.3 trillion won ($43.6 billion) asset revaluation. However, its results still fell short of the high market expectations fueled by the artificial intelligence boom.

South Korea's Minister of Economy and Finance, Choi Sang-mok, told parliament on Wednesday that the government is conducting internal research on measures to stabilise the stock market, including adjusting regulations related to single-stock leveraged ETFs. Some analysts believe these products exacerbate market volatility.

Choi Sang-mok apologised for introducing single-stock leveraged exchange-traded funds (ETFs) without careful consideration. He made the remarks in response to a lawmaker's demand for an apology during a parliamentary session.