South Korean stocks traded 0.81 percent lower late Tuesday morning amid heightened political tension with North Korea, analysts said.

The benchmark Korea Composite Stock Price Index (KOSPI) shed 15.73 points to 1,937.48 as of 11:20 a.m.

Tech blue chips led the decline, with market behemoth Samsung Electronics falling 0.63 percent, and top chipmaker SK hynix losing 2.67 percent.

Brokerage houses were also trading in negative territory, with Samsung Securities decreasing 2.66 percent and KDB Daewoo Securities moving down 2.13 percent. Woori Investment & Securities lost 2.47 percent.

North Korea has vowed to conduct its third nuclear test in response to the U.N. Security Council resolution tightening sanctions against it as punishment for its December rocket launch.

The local currency was changing hands at 1,088.60 won to the greenback as of 11:20 a.m., down 4.00 won from Monday's close. (Yonhap News)