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Seoul shares tumbled nearly 2 per cent on Thursday as risk appetite weakened after the U.S. Federal Reserve hinted at a slower monetary easing cycle next year and U.S. tech giant Micron Technology's sharp losses overnight. 

The benchmark Korea Composite Stock Price Index (KOSPI) plummeted 48.5 points, or 1.95 percent, to close at 2,435.93.

The local currency was trading at 1,451.9 won against the greenback at 3:30 p.m., down 16.4 won from the previous session to reach a 15-year low, reports Yonhap news agency.

The KOSPI's trade volume was moderate at 492.8 million shares worth 8.3 trillion won (US$5.7 billion), with losers outnumbering winners 681 to 212.

Foreigners and institutions dumped local shares worth 429.8 billion won and 504.2 billion won, respectively, as the Fed signalled fewer rate cuts in 2025 with hotter-than-expected inflation readings.

The Fed's caution sapped investors' risk appetite despite its third consecutive rate cut, also driving down major U.S. indexes overnight.

The Dow Jones Industrial Average fell 2.58 percent, the S&P 500 dropped 2.95 percent and the tech-heavy Nasdaq Composite slid 3.56 percent.

Wall Street was also hit by Micron Technology's 4.33 percent fall sparked by weaker-than-expected earnings guidance. The company's shares tumbled more than 10 percent during after-hours trading.

"The Fed's hawkish stance led to the weakening of the Korean won, sparking foreign and institutional investors to flock away from the Korean market," Lee Kyoung-min, an analyst at Daishin Securities, said.

In Seoul, most blue-chip tech shares steeply declined.

Tech behemoth Samsung Electronics lost 3.28 percent to 53,100 won, while its chipmaking rival SK hynix shot down 4.63 percent to 175,000 won.

Leading battery maker LG Energy Solution shed 2.49 percent to 372,000 won, tracking Tesla's 8.28 percent slide overnight.

Top automaker Hyundai Motor also dropped 2.08 percent to 212,000 won, and Kakao, the operator of the country's dominant mobile messenger, plummeted 5.07 percent to 41,200 won.

Samsung Biologics dipped 2.24 percent to 958,000 won and Celltrion tumbled 3.41 percent to 192,400 won.