Foreign investors remained net sellers of South Korean stocks in August for a third consecutive month, the financial watchdog said Tuesday, amid rising concerns that a massive outflow of foreign funds would deal a hard blow to Asia's fourth-largest economy.

Foreigners dumped a net 3.94 trillion won ($3.34 billion) worth of local shares last month, expanding from a net selling of 2.26 trillion won the previous month, according to the Financial Supervisory Service.

The August figure marks the highest foreign sell-off since June 2013, when the net foreign outflow reached 5.1 trillion won.

The value of their stock holdings totaled 405.5 trillion as of the end of August, accounting for 28.4 percent of the total market capitalization, down 0.5 percentage point from a month earlier and marking a six-year low.

British investors topped the sellers' list, offloading a net 1.26 trillion won last month, followed by investors from Luxembourg and Ireland with 885.4 billion won and 649.7 billion won, respectively.

"Since the U.S. Fed has hinted at a possible rate hike within 2015, emerging markets are experiencing a wild foreign exodus throughout the world," said Yoo Jin-hyuk from the Financial Investment Supervisory Department at the FSS. "South Korea has also joined the global tendency."

He said the Fed's monetary meeting slated for later this week is likely to determine whether foreign investors will continue to offload holdings or not.

The Financial Services Commission, South Korea's top financial regulatory body, said earlier that the foreign selling run is not so worrisome, given the country's ample foreign reserves and its strong current account balance.

As of end-August, South Korea's foreign exchange reserves reached $367.9 billion. Its current account surplus came to $10.11 billion in July, marking the 41st consecutive month of surplus. 

On the local bond market, meanwhile, foreign investors sold a net 216 billion won in August for three straight months, with the amount sharply decreasing from a net selling of 2.6 trillion won.

Their bond ownership reached 102.7 trillion won as of end-July, down from 103 trillion won a month earlier, according to the FSS. (Yonhap)