Seoul: South Korean stocks extended their decline for the second straight session on Monday, driven by ongoing uncertainties surrounding artificial intelligence (AI) sectors. The local currency, the won, also experienced a significant drop against the U.S. dollar.

According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) decreased by 7.2 points, or 0.19 percent, closing at 3,846.06. This follows a substantial 3.79 percent drop recorded on Friday. The KOSPI initially opened higher due to foreign buying sparked by renewed hopes for a rate cut in the United States. However, as the day progressed, foreign investors shifted to net sellers, causing the index to fall.

The trading volume was moderate, with 363.4 million shares valued at 20.3 trillion won (approximately US$13.8 billion) changing hands. Declining stocks outnumbered advancing ones by 576 to 306. Foreign investors led the market's decline by offloading a net 427.1 billion won worth of shares. Individual investors also contributed to the downward trend, selling a net 454 billion won, while institutions purchased a net 896.9 billion won.

"Foreigners bought tech shares, especially Samsung Electronics, but the entire index did not benefit from their purchase," noted Lee Jae-won, an analyst from Shinhan Securities. Major shares ended mostly in negative territory, with chip giant SK hynix retreating 0.19 percent to 520,000 won and leading carmaker Hyundai Motor falling 0.77 percent to 257,500 won. LG Energy Solution, a top battery maker, sank 3.17 percent to 412,000 won, while steelmaker POSCO Holdings decreased 2.58 percent to 302,500 won.

Defense giant Hanwha Aerospace saw a decline of 1.61 percent to 855,000 won, and major retailer Shinsegae tumbled 5.26 percent to 216,000 won. Samsung Biologics dropped 0.45 percent to 1.78 million won on its first trading day following the spinoff of its biosimilar development business.

In contrast, Samsung Electronics rose by 2 percent to 96,700 won, and gamemaker NCSOFT surged 5.85 percent to 202,500 won, bolstered by the popularity of its new game title, Aion 2. The local currency was quoted at 1,477.1 won against the U.S. dollar at 3:30 p.m., marking a decrease of 1.5 won from the previous session.

Bond prices, which move inversely to yields, finished lower. The yield on three-year Treasurys increased by 3.2 basis points to 2.904 percent, while the yield on the benchmark five-year government bonds rose by 3.1 basis points to 3.107 percent.