South Korea's top financial regulator pledged Tuesday to take pre-emptive measures to cushion the fallout from a global stock rout and ease investor jitters.

Nagging concerns over China's economic slowdown have rattled the global financial market in recent days, sending local stocks and the South Korean won plunging as foreigners dumped share holdings.

The benchmark KOSPI tumbled to a two-year low on a China stock rout on Monday, with the Chinese bourse nosediving more than 8 percent.

"Recent external factors, including a sharp fall in the Chinese stock market, Chinese yuan devaluation and a possible U.S. rate hike, dragged down the South Korean market," Financial Services Commission Chairman Yim Jong-yong said in a market monitoring meeting.

"As the external shocks will continue to weigh on South Korea for a while, we have to make all-out efforts to alleviate the volatility of the local capital market," he said. "We will check every risky external and internal factor, and take pre-emptive steps to deal with them."

In order to boost investor sentiment and relax fears, the financial authorities will give timely and precise information on the South Korean economy to market players and prevent any misleading decisions, he said.

Separately, the finance ministry said U.S. and European stocks tumbled overnight due to escalating concerns over weakening growth in the world's second-largest economy, increasing market volatility.

The Financial Supervisory Service, the country's financial oversight body, has asked local banks to secure ample foreign liquidity to fully cope with potential risks of a rise in borrowing costs.

The FSS said South Korean banks' foreign currency liquidity conditions remained sound in August despite the fluctuation of the Korean won, which plummeted to a four-year high last week.

The foreign currency liquidity ratio of local commercial and state banks came in at 106.4 percent as of Thursday last week, above the advisable level of 85 percent, the watchdog added.

The FSC chairman said the overnight inter-Korean agreement to end military tensions triggered by the North's land mine provocation will likely help stabilize the stock market.

The geopolitical risk has delivered a fresh threat to the local equity market already plagued by jitters over China's slowing economy and a possible U.S. interest rate hike later this year.

Wrapping up four days of high-level talks, South Korea agreed to stop anti-Pyongyang propaganda broadcasts via loudspeakers along the heavily armed border, while North Korea expressed regret over its land mine attack that seriously injured two South Korean soldiers.

The finance ministry said it, along with other financial regulators, will maintain around-the-clock monitoring of global market developments that could come as a drag on Asia's fourth-largest economy.

"The government will keep tabs on overall market developments and devise contingency plans to reduce possible fallout on the economy," it said. (Yonhap)