Seoul: Seoul stocks experienced a significant drop of more than 3 percent on Monday as investors reacted to ongoing geopolitical uncertainties and warnings from U.S. tech executives regarding the rapid pace of artificial intelligence (AI) development. The Korean won also weakened against the U.S. dollar.

According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) closed at 6,684.37, dropping 225.54 points or 3.26 percent after opening sharply lower. Trade volume was relatively light, with 274.4 million shares exchanged, valued at 20.19 trillion won (US$14.93 billion). The market saw 561 losers against 308 winners.

Retail investors were net buyers, purchasing 2.97 trillion won, while institutional and foreign investors collectively offloaded a net 4.46 trillion won. Lee Kyoung-min, an analyst from Daishin Securities, noted that the controversy surrounding the pace of AI development was a major factor in the market's sharp decline.

The postponement of a meeting expected to resume transit in the Hormuz Strait contributed to Brent crude prices remaining above US$108 per barrel, further dampening investor sentiment. Over the weekend, Dario Amodei, co-founder of Anthropic, proposed slowing AI advancement to ensure public safety, a call that was supported by other U.S. AI executives.

In Seoul, many market heavyweights ended the day in the red. Samsung Electronics, the top-cap stock, fell by 4.05 percent to 249,000 won, while competitor SK hynix decreased by 6.35 percent to 1,697,000 won. LG Energy Solution, Hyundai Motor, and Hanwha Aerospace saw mixed results, with the latter gaining 5.18 percent to 1,137,000 won.

Financial stocks showed resilience amid expectations that central banks in South Korea and the U.S. would maintain a prolonged monetary tightening stance. KB Financial and Shinhan Holdings both posted gains.

The Korean won was quoted at 1,347.3 against the U.S. dollar, a decrease of 1.4 won from the previous session's close. Bond prices fell, with the yield on three-year Treasurys rising 1.1 basis points to 4.025 percent, and the benchmark five-year government bond's yield increasing by 1.2 basis points to 4.279 percent.