Foreign funds of more than 300 trillion won (260 billion U.S. dollars) have flowed into the South Korean financial market since the U.S. Federal Reserve implemented the quantitative easing (QE) measures in 2008, financial watchdog data showed Friday.

Foreign holdings of listed stocks and bonds in South Korea were 512.7 trillion won as of the end of May, surging from 208.2 trillion won at the end of 2008 when the U.S. central bank conducted the first round of quantitative easing program, according to data of the Financial Supervisory Service (FSS) cited by Yonhap News Agency.

Among the total increase of around 300 trillion won, 114 trillion won came from U.S. investors, boosting concerns that such funds would abruptly flow out of the local financial market if the Fed starts to reduce bond purchases later this year as expected.

Fed Chairman Ben Bernanke said Wednesday that the U.S. central bank was likely to begin reducing the pace of quantitative easing later this year before bringing it to an end by the middle of next year.

Bernanke mentioned the earlier-than-expected tapering of the bond purchase program for the first time on May 22 when he made the remarks to U.S. lawmakers. Following Bernanke's comments, foreign holdings of domestic stocks and bonds continued to fall from 512.7 trillion won as of end-May to 482 trillion won on Wednesday.

The benchmark KOSPI sank 1.5 percent Friday after plunging 2 percent in the previous session. The won/dollar exchange rate closed at 1,154.7 won, jumping from the Wednesday's close of 1, 130.8 won. Endi