South Korean stocks opened sharply lower on Tuesday as Washington's designation of China as a currency manipulator raised global financial market volatility.

The benchmark Korea Composite Stock Price Index(KOSPI) shed nearly 49 points or two-point-five percent, falling to one-thousand-898-point-41 in the first five minutes of trading.

It is the first time the main bourse fell below the one-thousand-900 mark in over three years.

KOSPI already dropped three-point-five percent in the previous two sessions since Friday, following Japan's decision to remove South Korea from a shortlist of preferential trade partners over a colonial-era political dispute.

The secondary KOSDAQ index also fell Tuesday morning, dropping as low as 540-point-83, or the lowest in four years and seven months, before slightly recovering.

The local currency opened four-point-seven won lower against the dollar at one-thousand-220 won before recovering some of its losses.