South Korean shares ended in negative territory on Wednesday on worries that the U.S. dollar may strengthen amid expectations for further stimulus measures by the European Central Bank (ECB).
The benchmark Korea Composite Stock Price Index (KOSPI) declined 14.64 points, or 0.72 percent, to 2,009.29 at the close.
Trading volume stood at 623.97 million shares worth 4.34 trillion won (3.73 billion U.S. dollars).
The KOSPI extended earlier losses throughout the session on concerns that the ECB would expand its quantitative easing during its regular policy meeting scheduled for Thursday. The expected ECB monetary accommodation put upward pressures on the dollar to the South Korean currency.
The South Korean currency finished at 1,164.3 won against the greenback, down 6.3 won from Tuesday's close.
The stronger dollar tends to serve as a positive factor to the export-driven South Korean economy, but the weak South Korean currency may trigger foreign capital flow out of the South Korean stock market on concerns about foreign exchange losses.
Foreign investors dumped local shares worth 318 billion won after raising stock holdings in the previous day. Institutional investors kept their buying trend for 13 straight sessions, but it failed to block the KOSPI's decline as their purchase stood merely at 14 billion won.
Retail investors bought a net 118 billion won worth of stocks. Most large-cap shares lost ground. Market bellwether Samsung Electronics dipped 1.6 percent, and top carmaker Hyundai Motor slid 0.7 percent.
The state-run power supplier Korea Electric Power Corp. slumped 1.6 percent, and Samsung C&T lost 0.3 percent. The biggest auto parts maker Hyundai Mobis fell 1 percent, and memory chip giant SK Hynix declined 0.5 percent.
The No.2 carmaker Kia Motors retreated 0.9 percent, and the most-used search engine Naver lost 1.2 percent. Bond prices ended higher.
Yields on the liquid three-year treasury notes fell 1.0 basis point to 1.762 percent, and the return on the benchmark 10-year government bonds dipped 1.9 basis points to 2.256 percent.
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