The Korea Composite Stock Price Index fell more than 1 percent to below 1,920 points on Monday, and the won also plunged against the dollar.
The KOSPI closed down 1.09 percent at 1,919.96 points on the first trading day after the U.S. Federal Reserve decided last Wednesday to throttle back quantitative easing by US$10 billion per month.
The Fed decision caused jitters over the implications for emerging economies in addition to the slowing Chinese economy.
The won plunged W14.1 against the dollar to W1,084.5 from the previous day, the biggest drop in eight months. Following the cut in quantitative easing, demand for the dollar, considered a safety asset, is rising.