Seoul shares ended slightly lower on Tuesday, with top lender Kookmin Bank knocked by a broker downgrade and as investors turned increasingly cautious ahead of an expected rise in US interest rates.
Trading was light as local investors awaited news of a South Korean taken hostage and threatened with beheading by militants in Iraq. Seoul has rejected their demands to withdraw a plan to send 3,000 more troops to Iraq to join a non-combat mission already there.
The benchmark Korea Composite Stock Price Index (KOSPI) closed down 0.38 percent at 746.48 points, with a late afternoon rally helping narrow losses from a session low of 732.79 points.
A total of 319.4 million shares worth 1.51 trillion won changed hands, the lowest turnover since July 1, 2003 when 1.41 trillion won worth of shares were traded.
"Local investors were held back by lingering uncertainties surrounding global equities markets and a sideways move in US markets ahead of an expected US interest rate rise," said Hyun Jeong-hwan, an analyst at SK Securities.
Shares in Kookmin Bank ended down 1.49 percent at 33,100 won, the lowest since May 29, 2003 when they ended at 32,200 won.
The September KOSPI 200 futures index ended down 0.80 points at 96.40 and the underlying KOSPI 200 spot index was down 0.32 points at 96.48.
Local institutions bought a net 37.1 billion won worth of shares, while foreigners sold a net 82.5 billion won ($71.30 million) in shares.
Decliners topped gainers by 455 to 251 with 89 stocks unchanged.
The junior Kosdaq ended down 0.77 percent at 366.28.