South Korean shares opened almost flat Wednesday amid escalating tensions between the two Koreas, bucking overnight Wall Street gains.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 1.25 points, or 0.06 percent, to 2,136.80 in the first 15 minutes of trading.

The loss followed North Korea's announcement that it will redeploy troops to two inter-Korean business zones near the border and reinstall border guard posts.

The communist regime destroyed the inter-Korean liaison office, a symbol of the two Korea's peace efforts, the previous day.

The Bank of Korea, however, said Pyongyang's moves is expected to have limited influence on the South's economy.

In Seoul, large caps traded mixed.

Market bellwether Samsung Electronics lost 0.77 percent, and No. 2 chipmaker SK hynix dropped 1.41 percent.

Internet giant Naver gained 1.23 percent.

Top pharmaceutical firm Samsung BioLogics spiked 1.57 percent, while leading chemical maker LG Chem advanced 3.79 percent.

The local currency was trading at 1,235.45 won against the US dollar, down 4.65 won from the previous session's close. (Yonhap)