The benchmark KOSPI fell 0.46% to close at 8,051 on Monday, reversing gains from the previous session as technology stocks retreated amid renewed AI valuation concerns.
Markets assessed whether heavy AI infrastructure spending would continue translating into strong profits following the sector's recent rally.
Additionally, foreign and institutional investors accelerated selling, fueling a broad-based market decline as they locked in profits after the index's strong gains this year.
Samsung Electronics gained 2.75% on optimism ahead of its second-quarter earnings, while SK hynix tumbled 3.38% ahead of its planned $29 billion Nasdaq depositary receipt listing.
Losses were also seen in SK Square (-5.92%), LG Energy Solution (-2.21%), and Hanwha Aerospace (-1.36%).
Meanwhile, President Lee Jae Myung instructed officials to swiftly implement major AI and semiconductor projects announced last week, underscoring the government's continued support for the sector.