"Investors are beginning to worry that measures including a tax cut pledged by Trump may be held off, which triggered selling in the stock market," said Seo Sang-young, an analyst at Kiwoom Securities Co.

"Having said that, we need to be reminded of the fact that any outcome of political uncertainty in the past barely changed the course of market trend."

US markets fell as much as nearly 2 percent on Wednesday (local time), as hopes for pro-economy policies proposed by the Trump administration diminished with an intensifying controversy over Trump's alleged interference with an FBI probe of former National Security Adviser Michael Flynn regarding his alleged ties with Russia.

Trump is also facing mounting pressure even from the Republicans over an allegation that he gave classified information about an Islamic State operation to Russia.

Individual and institutional investors here opted to unload their holdings of local equities, with a net 19.7 billion won and a net 59.8 billion won, respectively. Foreigners bought a net 22.7 billion won, much lower than their daily average net purchase over the past month.

Most shares finished bearish, led by cosmetics and insurance companies. Major cosmetics and household item maker LG Household & Healthcare dipped 2.2 percent and nonlife insurer Hyundai Fire & Marine Insurance dropped 2.51 percent to 36,900 won.

But gains in automobiles and some steelmakers helped offset the fall. Top automaker Hyundai Motor soared 4.1 percent to 165,000, with Hyundai Steel climbing 2.58 percent to 55,700 won.

The local currency ended at 1,124.50 won against the greenback, down 6.2 won from Wednesday's close. 

Bond prices, which move inversely to yields, closed almost flat. The yield on three-year Treasurys inched down 0.1 basis point to 1.683 percent and the return on the benchmark five-year government bonds also slid 0.1 basis point to 1.900 percent. (Yonhap)