The South Korean stock market opened sharply lower on Monday following the breakdown of talks between the United States and Iran, with US President Donald Trump announcing a blockade of the Strait of Hormuz.

The Korea Composite Stock Price Index (KOSPI) opened down 2.08%. The index later pared some losses, declining by 89.15 points, or 1.52%, to 5,769.72 in the first 15 minutes of trading.

Over the weekend, the United States and Iran held face-to-face talks in Pakistan, but the negotiations ultimately failed to yield an agreement.

Following the collapse of the talks, President Trump stated on social media that the US Navy would blockade the Strait of Hormuz. The US military said the measure would take effect at 10:00 AM Monday US time.

The US and Iran had previously announced a two-week ceasefire agreement on April 7, but that agreement is now at risk.

In Seoul, most large-cap stocks declined, influenced by heavy selling from foreign investors.

Market bellwether Samsung Electronics fell 2.91%, while chip giant SK Hynix dropped 1.36%.

Hyundai Motor saw its shares decline by 2.15%, and its affiliate Kia Motors fell 1.21%.

Leading battery manufacturer LG Energy Solution decreased by 0.61%, and KB Financial Group dropped 0.69%.

Defense stocks performed strongly, with Hanwha Aerospace rising 0.46% and LIG Nex1 gaining 1.63%.

As of 8:15 AM Beijing time, the South Korean won was trading at 1,487.8 against the US dollar, a decrease of 5.7 won from the previous session's close.