The benchmark Korea Composite Stock Price Index plunged 26.87 points, or 1.14 percent, to 2,330.82 in the first 15 minutes of trading.
On Sunday, Pyongyang claimed it successfully conducted a test of a hydrogen bomb that can be loaded on an intercontinental ballistic missile.
Tech giants lost ground, with top cap Samsung Electronics dropping 1.42 percent and chipmaker SK hynix losing 1.6 percent.
Flat panel maker LG Display shed 1.79 percent.
Other major shares also traded bearish, with top portal operator Naver moving down 2.28 percent and No. 1 automaker Hyundai Motor falling 1.05 percent.
The local currency was trading at 1,129.60 won against the U.S. dollar, down 6.80 won from the previous session's close. (Yonhap)