Traders said the selloff would likely continue for the next couple of weeks as markets and global leaders seek answers to the persistent debt crisis in Europe. "Investors are cutting their exposure to risk as the most extreme risks -- such as Greek default -- are looming closer than they expected," said Jung Sang-jin, a senior fund manager at Dongbu Asset Management. "The selloff is likely to continue for a couple of weeks, until either shares become really cheap or some sort of resolution is more apparent." Likely continued weakness in the won was also seen weighing on the stock market but buying appetite may emerge as the KOSPI approaches the low 1,600 point level, Jung added. The Korea Composite Stock Price Index (KOSPI) was down 4.63 percent at 1,687.77 points as of 0152 GMT, after hitting as low as 1,658.06 points, its lowest in a week. Investors in Seoul were quick to offload stocks after the market was closed on Monday for a public holiday, said Lee Sun-yeb, a market analyst at Shinhan Investment Corp. Greece's admission that it will miss its financial deficit target this year, despite ever deeper cost-cutting measures, provoked a sharp selloff in stock markets on Monday and raised new doubts over a planned second international bailout. Foreign investors were sellers of a net 137.8 billion won ($117 million) worth of stocks, poised to snap a four-session buying streak. Pension funds also turned net sellers of 14.9 billion won after 18 straight sessions of buying. Banking stocks were hit particularly hard after their US peers tumbled overnight. "South Korean banks will be directly affected by the worsening financial environment in Europe, which is why the market is anxious to sell shares in the sector," said Hwang Seok-kyu, an analyst at Kyobo Securities. KB Financial Group shares were down 5.7 percent and Shinhan Financial Group shed 6.8 percent. Crude oil refiners and steelmakers also lost ground as a weaker won will make it more costly to import raw materials. Shares in S-Oil , the country's No.3 crude oil refiner, dropped 9.3 percent and GS Holdings , the holding company for the country's No.2 crude oil refiner, was down 9.2 percent. But defensive issues outperformed, with SK Telecom , the country's top mobile phone operator, trading flat and Nong Shim , an instant noodle and snack manufacturer, rising 1.9 percent. SK C&C gained 0.3 percent after Hana Bank said it purchased 2 million shares in the company.