SEOUL — South Korea's benchmark KOSPI index plunged 398.66 points, or 5.80%, to close at 6,471.17 on Wednesday, its second consecutive day of sharp declines, as a global selloff in semiconductor stocks combined with surging bond yields and renewed Middle East tensions to rattle investors across Asian markets.

The Korea Exchange activated a sell-side sidecar, a mechanism that temporarily suspends program sell orders, at 9:06 a.m. local time after the index tumbled as much as 5.6% within the first minutes of trading. The KOSPI opened at 6,528.77, down 4.96% from the previous session, before losses widened further as the morning progressed, briefly touching 6,430.93 points, a decline of 6.39%, before settling into a range around the 6,400 to 6,500 level for the remainder of the session.

South Korea's chipmakers bore the brunt of the selling. According to Trading Economics, Samsung Electronics and SK Hynix plunged 7.54% and 9.93%, respectively, tracking steep losses in U.S. semiconductor stocks overnight. Other major names also fell sharply: SK Square dropped 11.54%, Hyundai Motor fell 5.17%, Kia Corporation slid 3.21%, KB Financial Group declined 1.72% and HD Hyundai Heavy Industries dropped 3.06%. By sector, only construction, up 1.84%, and pharmaceuticals, essentially flat with a 0.01% gain, avoided the broad selloff, while utilities and electronics sank 7.68%, manufacturing fell 6.36%, insurance dropped 5.89%, finance declined 4.81%, securities fell 4.6% and distribution dropped 4.45%, according to figures reported by the Asia Business........

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