Signs of slowing growth have taken centre stage again after equity markets rallied earlier this month on monetary easing measures taken by the U.S Federal Reserve and the Bank of Japan, as well as on the ECB's bond-buying plan.
Institutional investors joined foreigners in dumping stocks, with sentiment also hurt by protests in Spain that has underscored the country's financing difficulties.
"Despite ample liquidity in the market, investors remain concerned about whether economic fundamentals are really improving," Kim Hak-kyun, an analyst at Daewoo Securities.
The Korea Composite Stock Price Index (KOSPI) declined 0.6 percent to 1,979.06 points as of 0225 GMT, its lowest intraday level since Sept. 13. The KOSPI closed down 0.6 percent the previous day.
"The KOSPI is under pressure and is suffering a technical correction, and this is likely to continue this week," said Park Seok-hyun, an analyst at KTB Investment & Securities.
But Hyundai Motor, South Korea's second valuable stock after Samsung Electronics, bucked the trend, rebounding 1.8 percent.
Korea Investment & Securities said in a report that Hyundai gained market share in China in August, while its Japanese rivals suffered from falls, hurt by the territorial dispute between Japan and China.
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