The main bourse index Kospi closed at 2,329.65, down 1.19 percent, while the tech-heavy secondary Kosdaq tumbled 1.68 percent to 650.89.
Of the Kospi-listed top 20 players in market capitalization, SK Innovation, a local refiner, was the only firm in upturn.
The North’s sixth nuclear test Sunday involved an underground detonation of a hydrogen bomb that the North claimed is missile-ready.
Despite such a declaration of advancement in the North‘s nuclear program, foreign investors took a moderate stance. Offshore net purchase of Kospi stocks stood at 4.4 billion won ($3.9 million). Individual investors in South Korea net sold stocks worth 343.3 billion won.
Not all previous five nuclear tests had exerted lingering impacts on the first-tier stock market. Out of five nuclear tests, only two dragged down the Kospi a month after -- 2.65 percent from the second nuclear test and 0.4 percent from the fourth. The Kospi gained a month after the other three detonation tests.
However, the markets might suffer from persisting geopolitical tension, as North Korea provocations are forecast to last longer, according to Ma Ju-ok, an analyst at Hanwha Investment & Securities.
“The continuing geopolitical crisis will trigger South Korean markets’ repeated adjustment,” Ma wrote. “The North sees the US military action not on the cards and will exert threats until it resumes talks with the US.”
Local currency weakened by 10.2 won against the greenback, with US dollar ending at 1,133 won, up from 1,122.8 won on the previous trading day.
The South Korean won is subject to widening volatility, as the North Korea risk “is entering in the next phase,” wrote Jeon Seung-ji, a foreign exchange analyst at Samsung Securities, in a report.
Gold rose 1.74 percent from Friday and was being traded at 48,400 won per gram, marking the highest in about 10 months, according to the Korea Exchange.