SEOUL: South Korea's KOSPI stock benchmark pulled back sharply after hitting an all-time high just below the 8,000 level on Tuesday, as investors took heightening uncertainty over the Middle East conflict as a cue to book profits.

The KOSPI rose 2.3% to a record high of 7,999.67 before suddenly reversing its course to fall as much as 5.1% to 7,421.71.

Chipmaker Samsung Electronics fell more than 6% and peer SK Hynix skidded more than 4%. Earlier in the session, Samsung and SK Hynix gained 2.1% and 4.6%, respectively, to notch record levels.

"External uncertainty triggered underlying profit-taking pressure to explode. While there is little significance to the figure of 8,000 itself, it is up 60% from 5,000 in late March, which is not common," said Huh Jae-hwan, an analyst at Eugene Investment Securities.

The index rose 4.3% on Monday, reaching near 8,000 levels in less than a week after it breached 7,000, led by strong retail buying. This prompted authorities to issue a rare warning against taking too much risk.

U.S. President Donald Trump said that a ceasefire with Iran was "on life support" after Tehran's response to a U.S. proposal to end the war made clear the two sides were still far apart on a number of issues.

"The recent rally had been concentrated too much on the semiconductor sector," said Han Ji-young, an analyst at Kiwoom Securities.

The KOSPI has risen more than 17% just this month, bringing its year-to-date gains to over 80%. In 2025, it rose 76%, the biggest since 1999, as it emerged as the world's best performer in an artificial intelligence-driven rally.

Foreign investors were net sellers of shares worth 3.8 trillion won ($2.56 billion) on Tuesday, while retail investors bought 3.2 trillion won.

Most other index heavyweights also fell sharply. Of the total 899 traded issues, only 84 shares advanced, while 808 declined.

The won was quoted at 1,486.1 per dollar on the onshore settlement platform, 0.90% lower than its previous close at 1,472.7. ($1 = 1,485.1000 won) - Reuters