South Korea's benchmark Kospi index dropped 4.9 percent Monday before a partial recovery, as investors reacted to the death of North Korean leader Kim Jong II.
The low point did not hold, as the index closed down 3.43 percent.
Stock indexes throughout Asia struggled to make gains. The Shanghai composite index in China dropped 0.3 percent. The Nikkei 225 index in Japan closed down 1.26 percent.
The TAIEX index in Taiwan lost 2.24 percent Monday. In Hang Seng index in Hong Kong lost 1.18 percent, as the Asia Dow dropped 1.72 percent.
In South Korea, the military was put on alert, the North Korea Times reported. Policy makers at the Bank of Korea, meanwhile, convened for an emergency meeting as the country's bond yields rose with the bond market in flux.
The leader's death may have a prolonged impact on stocks in Asia and elsewhere, as the issue of who will replace him is, as of yet, unresolved.
"Now there is a question mark over who's going to take the helm, and the markets are worried that there may be some instability, a fight for power over his position," said Roger Tan of SIAS Research in Singapore, the Times reported.