The benchmark Korea Composite Stock Price Index lost 8.69 points, or 0.37 percent, to 2,368.97 as of 11:20 a.m.
Earlier in the day, the North launched a ballistic missile eastward from its capital, the country's first missile launch after the United Nations Security Council adopted a fresh sanctions resolution this week.
Most large caps on the Seoul bourse traded mixed.
Market bellwether Samsung Electronics went down 0.64 percent, while global chipmaker SK hynix was up 0.13 percent.
The local currency was trading at 1,113.4 won against the US dollar, down 0.8 won from the previous session's close. (Yonhap)