The South Korean KOSPI index fell for a second consecutive trading session, with retail and semiconductor stocks leading the decline. The benchmark closed down sharply by 4.5% at 6,516.27 points.

Asian emerging market equities showed a mixed performance on Monday. South Korean stocks were hit hard, highlighting a further retreat from the artificial intelligence (AI) trading theme. Concurrently, escalating conflict in the Gulf region pushed oil prices higher, reigniting inflation concerns across Asian markets.

The South Korean market was closed for a holiday on Friday. Upon resuming trade on Monday, the benchmark Korea Composite Stock Price Index (KOSPI) dropped as much as 5.1% at one point.

During the session, the Korea Exchange triggered the sidecar mechanism, a circuit breaker for program trading, on the KOSPI. The index has plunged more than 20% so far this month, confirming it has entered bear market territory.