The total value of foreign shareholdings came to 404 trillion won as of the end of January, accounting for 28.1 percent of the total market capitalization, down 17 trillion won on-month, it noted.

"The 'Sell Korea' sentiment is attributable to lingering woes over the global economic downturn with ample signs of China's slowdown and its possible impact on emerging markets, which prompted investors to shun risky assets," said Lee Kyung-min, a researcher at Daeshin Securities.

British investors led the net selling, offloading a net 1.17 trillion won last month, followed by China and Cayman Islands with 476.2 billion won and 343.9 billion won, respectively.

But Middle Eastern investors' selling binge eased by dumping 52.1 billion won in January, a sharp drop from 832.3 billion won logged in December, according to the FSS.

On the local bond market, foreign investors also remained net sellers for two months in a row in January by dumping a net 487 billion won.

Foreigners' bond holdings stood at 101 trillion won as of the end of last month, down by 400 billion won on-month, according to the FSS. (Yonhap)