South Korean stocks fell sharply early Wednesday, triggering a temporary trading halt, as local chip stocks tracked an overnight retreat in their U.S. peers on Wall Street.

The Korea Exchange suspended trading on the Kospi briefly to curb excessive volatility after the benchmark index slumped more than 6% in morning trading.

The index pared some of its losses later in the session. It was recently down 3.9% at 6601.74.

Semiconductor makers were among the top decliners. Nvidia supplier SK Hynix fell as much as 9.7%, while Samsung Electronics, the world's top memory-chip maker, dropped as much as 8.0%.

Overnight losses in U.S. semiconductor stocks and a global bond selloff that pushed long-term yields to multiyear highs weighed on investor sentiment, said Kiwoom Securities analyst Han Ji-young.

The tech-heavy Nasdaq Composite fell 1.3% overnight. The Philadelphia Semiconductor Index, which track major U.S. chip stocks such as Nvidia, Broadcom and Micron Technology fell around 5% overnight.

In Seoul trading, foreign and institutional investors were net sellers, while retail investors remained net buyers.