Seoul shares closed lower on Wednesday for the first time in four sessions, as weaker oil prices hit refiners such as SK Corp while SK Telecom slid on year-end dividend payments.
Exporters such as LG Electronics Inc retreated as investors worried the inversion of the US yield curve could signal a possible slowdown in the US economy.
Sejong Securities Co tumbled 7.37 percent to 15,700 won after National Agricultural Co-operative Federation (NACF) said it had agreed to buy a controlling stake in the brokerage at a deep discount.
NACF said it would buy a 47.6 percent stake for 103.9 billion won ($102.6 million), which marks a 47 percent discount from Tuesday's closing price of 16,950 won.
The benchmark Korea Composite Stock Price Index ended down 0.39 percent at 1,368.16, after falling 1.5 percent at one point.
The index had hit record highs in four of the previous six sessions. It has gained nearly 53 percent so far in 2005, making it the best performing major market in Asia.
Top local oil refiner SK Corp fell 2.06 percent to 52,400 won after US oil futures settled down 27 cents at $58.16 a barrel due to mild US weather.
Oil was trading $57.85 per barrel in Asia.
GS Holdings Corp, which owns 50 percent of second-ranked oil refiner GS Caltex Corp, fell 3.44 percent to 23,850 won, while third-ranked S-Oil Corp shed 3.97 percent to 70,200 won.
Stocks with a high dividend yield ratio, such as telecoms companies, also fell.
SK Telecom Co fell 3.64 percent to 185,500 won, with analysts estimating the country's largest mobile phone carrier had paid 8,000 won per share in dividends.
Top fixed-line and broadband operator KT Corp dipped 4.64 percent to 41,100 won.
Exporters slipped after the US yield curve inverted for the first time in five years, historically a harbinger of looming recession.
LG Electronics, the world's fourth-largest handset maker, fell 1.43 percent to 89,700 won, while Hyundai Motor Co fell 0.61 percent to 97,300 won.
The United States accounts for about one-fifth of South Korea's total exports.
Among other decliners, top local lender Kookmin Bank fell 1.67 percent to 76,500 won as investors locked in gains ahead of the year-end.
Second-ranked Shinhan Financial Group fell 1.3 percent to 41,600 won. But car shipper Glovis rose for a third consecutive session since its market debut on Monday, as investors bet growing shipments by local car makers would boost its earnings.
Glovis gained 6.41 percent to 59,800 won, after surging by its daily 15 percent limit in the past two sessions.
Trade volume reached 368 million shares worth 4.2 trillion won compared to 423 million shares worth 4.2 trillion won on Tuesday. Decliners outnumbered gainers by 454 to 305 with 61 titles ending flat.
Foreign investors were net sellers for a ninth consecutive session, bringing their total sales over the period to a net 922.4 billion won ($911.2 million).
The March KOSPI 200 futures index rose 0.65 point to 176.35, while the underlying KOSPI 200 spot index fell 1.04 points to 176.16. The junior tech-heavy Kosdaq ended up 0.44 percent at 691.26.
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