Foreign investors are on a massive selling spree of South Korean stocks, dumping shares worth over 1 trillion won ($746 million) on the benchmark Kospi Wednesday, fueled by concerns that the US economy could be heading toward a recession.

On Wednesday, overseas investors shed shares worth 1.04 trillion won on the Kospi, continuing the sell-off stance shown in recent weeks. After offloading shares over 2.7 trillion won in August, they ditched shares worth 4.41 trillion won this month, according to the bourse operator Korea Exchange.

Amid this major shedding, the Kospi closed at 2,513.37, losing 10.06 points or 0.4 percent from the previous trading day. The secondary bourse Kosdaq gained 3.22 points or 0.46 percent, reaching 709.42.

The strong sell-off by overseas investors strikes a contrast with their net buying stance earlier this year. Foreign investors net-bought shares worth 22.9 trillion won on Kospi in the first six months of this year, setting a record since related data started to be compiled in 1988. They racked up shares worth 1.71 trillion won in July as well.

Yet in the recent net-selling trend, foreign investors have ditched chip shares, including the stock of market bellwether Samsung Electronics.

Samsung Electronics continued its seven-day losing streak on Wednesday. It closed at 64,900 won, down 1,300 won or 1.96 percent from the previous day. During intraday trading, its shares fell to a 52-week low, hitting as low as 64,200 won. It was the lowest figure since October.

With the shares experiencing their worst days this year, the tech giant's market cap has plunged to 387.43 trillion won, marking an over 100 trillion won drop from the 520 trillion won in July.

Reflecting such woes, securities firms are slashing the target price for Samsung Electronics to around 95,000 won, lowering the expectations from the previous price band between 105,000 won to 130,000 won. The cuts also reflect the projection that the tech giant’s third-quarter earnings may be weaker than the market forecasts.

The upcoming rate decision by the US Federal Reserve is expected to affect the local stock market, as it is categorized as an emerging market.

While the US Fed has kept the base rate steady between 5.25 and 5.5 percent for over a year, it is projected to cut the rate at the Federal Open Market Committee meeting Sept. 17-18.

As of Wednesday, the CME Group's FedWatch tool indicated a 69 percent chance that the US Fed would cut the base interest rate by 25 basis points at its upcoming meeting, while 31 percent speculated a 50 basis points cut.

Though the rate cut was expected to favor emerging market countries, including Korea, some view that the potential cut could hinder capital inflow as it would reflect concerns the US economy is slowing down.

"Foreign investors' selling spree is likely to continue for a while," economist Jeong Yong-taek from IBK Securities said. "Considering that the appeal for safe-haven assets would have to end for foreign investors to raise their stake in the Korean market, they are likely to maintain a 'sell' or 'underweight' stance."