South Korean shares finished lower on Wednesday, as concerns about weaker steel prices hit POSCO and other local steel makers, and as investors turned cautious ahead of the central bank's rate-setting meeting. "The market is split right down the middle on whether the Bank of Korea will cut rates tomorrow," said Oh Hyun-Senko, an analyst at Samsung Securities. "It's been so unpredictable in the past."
A Reuters poll of economists forecast the central bank would leave interest rates unchanged at a record low of 3.25 percent at its monetary policy committee meeting on Thursday.
The benchmark Korea Composite Stock Price Index (KOSPI) ended 0.48 percent lower at 880.03.
Trading was also cautious ahead of Thursday's expiry of options, analysts said.
Technology shares ended lower as concerns about fourth-quarter earnings offset gains from US tech bellwether Intel Corp's record quarterly revenue. Shares in Samsung Electronics Co Ltd, the world's biggest maker of memory chips, ended flat at 442,000 won. Samsung is set to announce quarterly earnings on Friday, with analysts expecting a 24 percent slump in profits.
Steel shares also fell, mirroring a decline in United States peers after investment bank CIBC World markets downgraded the US steel sector on expectations of lower prices amid rising supply.
POSCO Co Ltd, the world's fifth-biggest steel maker, fell 1.93 percent to 178,000 won, while INI Steel ended down 1.14 percent at 13,050 won.
Shares in panel makers fell as investors booked profits from sharp gains on Tuesday.
LG.Philips LCD Co Ltd, the world's No 2 LCD maker, closed 1.56 percent lower at 37,950 won.
A firmer South Korean won versus the dollar-renewed worries about the impact of a stronger local currency on the competitiveness of exports, the sole driver of economic growth during a two-year slump in domestic demand.
Shares in top local auto maker and key exporter Hyundai Motor Co fell 1.64 percent to end at 54,000 won.
Among the day's gainers, LG Electronics Inc rose 2.69 percent to 68,800 won on optimism strong mobile phone sales would help it avoid sharply lower earnings predicted for local technology peers.
Trade volume reached 314.4 million shares worth 2 trillion won (1.91 billion dollar) compared to 364.4 million shares worth 2.2 trillion won on Tuesday.
Losers edged out gainers by 408 to 308 with 95 titles ending flat.
Foreign investors bought a net of 42.7 billion won on the main bourse, while retail investors bought a net of 1.4 billion won. Institutional investors sold a net of 35.6 billion won.
The March KOSPI 200 futures index fell 0.95 point to 114.30 and the underlying KOSPI 200 spot index declined 0.57 point to 114.09.
The over-the-counter Kosdaq fell 0.46 percent to finish at 414.63.
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