Program trading was halted for five minutes starting at 2:09 p.m. after the Kosdaq index slipped more than 6 percent, the Korea Exchange said in a statement.
It was the first time since June 24, 2016, that the "sidecar" was activated according to exchange rules.
South Korea's currency and stocks lost ground on Monday over escalating trade tension between the United States and China, amid signs that Beijing may allow its yuan currency to depreciate over the fresh U.S. tariff threat.
South Korean stocks have also been under pressure as Japan removed Seoul from a list of trusted export destinations, prompting Seoul to take a tit-for-tat measure.
The tech-heavy Kosdaq index slid more than 6 percent to 577.1 points at one point in early afternoon trading on Monday.
Foreign investors sold a net 34.4 billion won ($28.3 million) worth of shares on the Kosdaq market. (Yonhap)