The benchmark Korea Composite Stock Price Index(KOSPI) on Friday plunged 39-point-76 points, or one-point-69 percent, to close at two-thousand-319-point-71.
The sharp drop comes as concerns mount over geopolitical risks surrounding the Korean Peninsula and the Western Pacific region amid North Korea's discussions of firing missiles at Guam.
As U.S. President Donald Trump raised the level of his warning against North Korea, foreign investors dumped 649-point-eight billion won worth of Korean stocks in the main bourse.
The tech-heavy KOSDAQ also fell, losing eleven-point-70 points, or one-point-83 percent. It closed the day at 628-point-34.
On the foreign exchange market, the value of the local currency weakened one-point-five won against the U.S. dollar, closing at one-thousand-143-point-five won.