SEOUL, (Xinhua) -- South Korean shares ended lower for two straight sessions Tuesday, sending the main stock index to fall below the psychologically significant level fist in 10 trading days, as local institutions continued to sell off stocks amid demand for cash holdings from stock-type fund clients.
The benchmark Korea Composite Stock Price Index (KOSPI) declined 12.72 points, or 0.63 percent, to close at 1,997.63. Trading volume stood at 219 million shares worth 2.7 trillion won (2.6 billion U.S. dollars).
The KOSPI, which took a strong start, turned downward and extended losses as pessimism remained among stock fund investors that the KOSPI's recent gains were overdone.
The main index topped this year's high for two straight days through last Friday despite lack of momentum to move the index to that level.
Institutional investors sold stocks worth 111.1 billion won, keeping a selling trend for the ninth straight session. Stock-type fund clients asked the institutions to cash in on their investment into stocks.
Foreigners remained net buyers for 11 straight trading days, but their purchase stood merely at 22.6 billion won ahead of the European Central Bank (ECB)'s monetary policy meeting this week. Retail investors purchased shares worth 96.5 billion won.
Market watchers said stocks fell at a relatively steep pace as the thin trading volume amplified the effect of sales by institutional investors, noting foreigners were cautious ahead of the ECB's regular meeting.
Most large-cap shares ended bearish. Top automaker Hyundai Motor and its affiliate Kia Motors slid more than 2 percent, and the nation's biggest auto parts maker Hyundai Mobis fell around 2 percent. Top steelmaker POSCO and the No.1 life insurer Samsung Life Insurance declined over 2 percent.
Tech giant LG Electronics advanced 1.6 percent ahead of the global launching of its latest smartphone G3. The nation's biggest web search engine Naver rebounded more than 1 percent after plunging 4 percent the previous day.
The Internet portal operator sank Monday as its smaller rival DAUM Communications announced a plan to merge with Kakao Talk, a local mobile instant messaging application that provides services of free text and free call.
The South Korean currency finished at 1,023.2 won against the greenback, up 0.8 won from Monday's close.
Bond prices ended mixed. The yield on the liquid three-year treasury notes added 0.01 percentage point to 2.83 percent, but the return on the benchmark five-year government bonds lost 0.01 percentage point to 3.36 percent.