South Korea's benchmark Kospi index opened lower on Monday, as investors digested fresh uncertainty surrounding US-Iran peace negotiations.
The decline follows a week of heightened geopolitical risk, with US President Donald Trump issuing renewed threats against Tehran, casting doubt on the viability of a diplomatic resolution to the ongoing conflict.
The negative sentiment in Seoul mirrors a broader retreat across Asian markets, which have struggled to find footing amid the geopolitical turmoil.
Traders are increasingly pricing in the risk that a breakdown in talks could lead to renewed military escalation, potentially disrupting global energy supplies and reigniting inflationary pressures.
This fear has already weighed on European equities, with major indices opening in negative territory as caution prevails.
The market reaction underscores the sensitivity of global risk assets to developments in the Middle East.