Korean stocks down ahead of FOMC meeting

Korean shares fell 0.12 percent Tuesday, ending a four-day winning streak, as investors took a wait-and-see stance ahead of the U.S policy rate-setting meeting later this week. The local currency fell against the U.S. dollar.

After swerving in and out of positive terrain, the benchmark Korea Composite Stock Price Index (KOSPI) lost 2.30 points to finish at 1,969.97.   

Investors found more reasons to stay cautious than continuing to add risky assets to their portfolios although a recovery in oil prices and muted woes over the global economy prodded them to buy stocks, analysts said.

"Depending on the results of the Federal Open Market Committee meeting due out Thursday (Korean time), investors will decide on whether to basket more risky assets in their portfolios. As rate freezes are widely expected this time in the U.S., a mild rally in Asian stocks are likely to continue for the time being," NH Investment & Securities analyst Lee Jun-hee said. 

Institutions sold a net 127 billion won ($169 million), overwhelming a net buying of 70 billion won stocks by foreigners and individuals.

Technology stocks pared their earlier gains on profit-taking, with top market cap Samsung Electronics falling 0.16 percent to 1,253,000 won and No. 2 tech firm LG Electronics plunging 2.87 percent to 60,900 won.

Among gainers, construction and steel companies rebounded from losses in previous sessions. Mid-sized builder Hyundai Development jumped 4.77 percent to 42,800 won and top steelmaker POSCO climbed 0.48 percent to 210,000 won.

The local currency closed at 1,187.70 against the greenback, down 1.60 won from Monday's close.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year Treasurys rose 0.1 basis point to 1.533 percent and the return on the benchmark five-year government bond fell 0.1 basis point at 1.661 percent. (Yonhap)