Seoul shares ended below the psychologically key 1,000-point level on Monday as record oil prices set off worries about profits at major manufacturers such as LG Electronics. But oil refiners such as SK Corp rose as investors bet oil price rises would lead to higher product prices.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 0.9 percent to close at 994.65 points. It had pulled above 1,000 points on Wednesday for the first time in three months.
"Oil prices hit a record, and this created even more uncertainty at a time when there are already worries over an economic recovery," said Choo Hee-yeop, deputy general manager of Asset Management Strategy at Korea Investment and Securities.
"The 1,000 point-level is not a strong resistance level, so surpassing it is possible, even within this week. But it will be hard for the market to gain significantly above it," he added.
NYMEX crude oil prices jumped to a record $59.18 a barrel in Asia trade, extending a surge in US trading on Friday amid concern about the ability of US refiners to cope with strong US demand.
South Korea imports all of its crude oil, making it particularly vulnerable to price hikes.
Major manufacturers fell, with LG Electronics Inc, the world's biggest maker of air conditioners, falling 1.88 percent to 68,000 won. Flat screen maker LG.Philips LCD Co Ltd dropped 3.35 percent to 49,000 won, but rose 0.41 percent to 49,200 won in after-hours trade.
State-run power provider Korea Electric Power Corp dropped 3.98 percent to 31,350 won on worries that higher fuel costs would hit profits.
Transportation stocks also fell, with Korean Air Co down 2.7 percent at 18,000 won.
However, SK Corp, the top local oil refiner, rose 0.71 percent to 56,400 won, on the prospect of limited refining capacity leading to tighter supplies and higher product prices.
Trade volume reached around 366 million shares worth 2.1 trillion won, compared with 451.3 million shares worth 2.6 trillion won on Friday. Losers edged out gainers by 466 to 245 with 87 titles ending flat.
Foreign investors bought a net of 11.3 billion won in shares on the main bourse, while retail investors bought a net of 13.2 billion won. Institutional investors sold a net of 80.4 billion won.
The September KOSPI 200 futures index fell 0.9 points to 128.17 and the underlying KOSPI 200 spot index fell 1.16 points to 128.17. South Korea's junior and tech heavy Kosdaq market fell 0.37 percent to finish at 489.20.