An electronic board showing the Korea Composite Stock Price Index at a dealing room of the Hana Bank headquarters in Seoul on Monday. (Yonhap)
An electronic board showing the Korea Composite Stock Price Index at a dealing room of the Hana Bank headquarters in Seoul on Monday. (Yonhap)

Seoul shares closed sharply lower Monday amid concerns over the United States' decision to impose high tariffs on goods imported from Canada and Mexico, potentially affecting South Korean businesses operating there. The Korean won was trading sharply lower against the US dollar.

The benchmark Korea Composite Stock Price Index dropped 63.42 points, or 2.52 percent, to close at 2,453.95.

Trade volume was moderate at 514 million shares worth 11.4 trillion won ($7.77 billion), with losers overwhelming winners 822 to 94.

Institutions and foreign investors combined dumped a net 1.24 trillion won worth of local shares, while retail investors purchased a net 1.12 trillion won.

On Saturday, US President Donald Trump announced he will impose 25 percent tariffs on imports from Canada and Mexico and 10 percent on goods from China.

The move, set to begin Tuesday, is expected to adversely affect Samsung Electronics, LG Electronics and other major Korean companies that have production bases in those countries.

"Tariffs were largely seen as just a tool and negotiation strategy for Trump, but now the market has begun to worry about their negative impact on the real economy," Lee Soo-jung, an analyst at Meritz Securities, said.

Blue chips sank heavily across the board, with market heavyweight Samsung Electronics down 2.67 percent to 51,000 won and its chipmaking rival SK hynix plunging 4.17 percent to 190,900 won.

LG Electronics, which has a production base in Mexico, nosedived 7.13 percent to 78,200 won.

Automotive and steel shares also closed in negative terrain.

Hyundai Motor slipped 1.94 percent to 202,000 won and Kia, which operates a manufacturing plant in Mexico, plummeted 5.78 percent to 96,100 won. Top steelmaker POSCO Holdings dove 4.61 percent to 248,500 after reporting weakened earnings.

Financial and bio shares also lost ground. KB Financial lost 3.16 percent to end at 88,800 won, and Celltrion slumped 2.06 percent to 176,000 won.

The local currency was trading at 1,467.2 won against the greenback at 3:30 p.m., down 14.5 won from the previous session, reaching its lowest point since Jan. 13. (Yonhap)