Seoul shares end a tad lower ahead of FOMC meeting

South Korean stocks closed marginally lower Tuesday as investors were wary ahead of the U.S. monetary policy meeting. The local currency rose against the U.S. dollar.

The benchmark Korea Composite Stock Price Index slid 3.43 points, or 0.17 percent to finish at 2,044.65. Trading volume was moderate at 436.2 million shares worth 4.0 trillion won ($3.53 billion) with decliners outpacing gainers 467 to 332.

Analysts said local investors remained jittery over a possible U.S. rate hike that could have a negative impact on the equity market.

"The market's still gripped by fears over the normalization of the U.S. monetary policy by the Fed. Unless such uncertainties go away, it's hard to say that the KOSPI will get any further upward momentum," said Gwak Hyun-soo, an analyst at Shinhan Investment Corp.

The Federal Open Market Committee is slated to decide on when to raise the interest rate at the two-day policy meeting that ends on Thursday (Seoul time), although many expect that the rate will remain unchanged again this month.

Foreigners and institutions sold off shares worth a net 1 billion won and 20 billion won, respectively, while retail investors scooped up a net 27.2 billion won. 

Most shares ended in negative terrain, led by steelmakers and insurers. POSCO, the country's top steelmaker, dropped 2.59 percent to 188,000 won, with life insurer Samsung Life Insurance falling 0.91 percent to 108,500 won.

But auto-related firms finished higher. Hyundai Mobis, the auto-parts making affiliate of Hyundai Motor, climbed 0.83 percent to 243,500 won and Kia Motors also gained 0.92 percent to 55,100 won.

Daewoo Shipbuilding & Marine Engineering, an ailing major shipbuilder, closed up 2.44 percent to 7,130 won despite its lackluster quarterly results after its creditors said it will announce a 4 trillion-won rescue plan later in the week.

The local currency ended at 1,130.00 won against the greenback, up 2.8 won from Monday's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys inched down 1.5 basis points to 1.630 percent and the return on the benchmark five-year government bonds slipped 2.4 basis points to 1.775 percent.  (Yonhap)