Seoul shares dip 1.6 pct ahead of Bernanke speech

South Korean stocks closed 1.6 percent lower Wednesday, as investors took to the sidelines ahead of a key speech by the U.S. Federal Reserve chief, analysts said.

The local currency inched down against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) declined 31.92 points to finish at 1,963.56. Trading volume was light at 240.8 million shares worth 3.19 trillion won ($2.97 billion) with losers far outstripping gainers 556 to 242.

Analysts said investors are curious to hear what Janet Yellen says about pursuing monetary policy if she becomes the new Fed chairman.

"It is very unlikely she makes any remarks that will prompt another tapering fear given that she has stood by Bernanke with the quantitative easing," said Park Sung-hoon, an analyst at Woori Investment & Securities Co.

The nominee for the new Fed head is scheduled to speak before a Senate-led hearing on Thursday, U.S. time. The incumbent Fed Chairman Ben Bernanke is also expected to give a speech.

On the Seoul bourse, foreigners dumped a net 196.2 billion won worth of local equities, extending their selling binge for an eighth straight session. Institutions lent hands to the KOSPI's fall with a net 41.9 billion-won selloff. Retail investors, however, scooped up a net 231.4 billion won.

Shares were bearish across the board, led by losses in large-cap exporters. Hyundai Heavy Industries, the world's biggest shipyard, tumbled 4.48 percent to 256,000 won, with Hyundai Merchant Marine, a logistics company, plunging 8.71 percent to 11,000 won.

Market bellwether Samsung Electronics sank 2.54 percent to 1,419,000 won.   

The local currency ended at 1,072.60 won against the greenback, down 1.2 won from Tuesday's close. (Yonhap News)