Seoul shares dipped on Friday for a third consecutive session, as worries about higher US interest rates hit exporters such as Samsung Electronics, while investors were also cautious ahead of US jobs data. Foreign investors unloaded a net 425 billion won ($409 million) worth of local shares, the most of any trading day so far this year.
Some analysts said selling emerged late in the session due to a terror alert issued for the New York subway system on Thursday. "Investors turned cautious ahead of the weekend because of the New York subway terror alert and US employment data," said Kim Dong-uk, a strategist at Daishi Securities.
The benchmark Korea Composite Stock Price Index (KOSPI) edged down 0.12 percent to end at 1,201.01. The index fell as much as 0.7 percent and gained as much as 1 percent at one point.
The KOSPI, which hit a record 1,246.61 on Wednesday, fell 1.6 for the week, its first weekly decline in six weeks.
Analysts expect shares to remain under pressure next week ahead of third-quarter earnings and a policy meeting by South Korea's central bank.
Wall Street fell on Thursday, after a Federal Reserve official said core US inflation was near the top of its acceptable range, sparking worries that the US central bank would raise interest rates more than expected.
Exporters led the market lower, with top local automata Hyundai Motor falling 1.63 percent to 78,700 won and Samsung Electronics Co Ltd, the world's biggest maker of memory chips, dipping 0.85 percent to end at 581,000 won.
Highness Semiconductor Inc, the world's second-biggest memory chip maker, fell 1.54 percent to 22,400 won, with the stock also tracking declines among US peers.
The United States accounts for about one-fifth of South Korea's total exports. Foreign investors have sold a net 1.7 trillion won worth over the last 11 sessions, but analysts said there had been no major changes to market fundamentals.
Investors were also awaiting US employment data, with a new poll of economists by Reuters estimating 143,000 jobs were lost in September in the aftermath of Hurricane Katrina.
Some investors were also jittery after New York authorities said they had received the most specific threat yet of a terror attack on the city's subway system.
But institutional investors, relishing a continued inflow of money from stock savings accounts held by retail investors, were heavy purchasers of local shares, retaining optimism about the domestic economy and improving corporate earnings.
Recent sharp decline's reversed course to turn higher on Friday, with SK Telecom Co, the country's top mobile operator, gaining 2.76 percent to 205,000 won.