South Korean stocks finished lower Monday, driven by a sharp fall in battery shares, on concerns about the Federal Reserve's continued monetary tightening path, a U.S. government shutdown and risks in the Chinese property sector. The local currency rose against the U.S. dollar.
The benchmark Korea Composite Stock Price Index shed 12.37 points, or 0.49 percent, to close at 2,495.76, extending a losing streak to the third session. Trading volume was moderate at 431.14 million shares worth 7.3 trillion won (US$5.46 billion), with losers outpacing gainers 661 to 223.
The index opened lower and had fallen more than 0.7 percent before erasing some of the losses.
Offshore investors sold a net 133.84 billion won worth of shares, while retail and institutional investors bought a net 48.54 billion won and 70.47 billion won worth of shares, respectively.
The U.S. central bank last week left its benchmark interest rate unchanged but signaled it could hike the borrowing rates again this year to bring inflation under control.
Investor sentiment was dampened further after U.S. lawmakers warned of a government shutdown on dimming hopes for a compromise to resolve a budgetary standoff.
Eyes were also on the Chinese property market, as the embattled developer Evergrande said it was unable to issue new debt due to an ongoing probe into one of its subsidiaries, which could disrupt its restructuring plans.
"The U.S.' monetary direction, the potential shutdown and other factors have weighed down the market, particularly as investor sentiment is weak ahead of the extended holiday at home," Han Ji-young, an analyst at Kiwoom Securities Co., said.
South Korean stock, ETF, derivatives and commodity markets will all be closed during the extended Chuseok holiday starting Thursday through Oct. 3.
Battery shares were among the biggest decliners on the Seoul bourse.
Leading battery maker LG Energy Solution sank 3.05 percent to 476,000 won, and POSCO Holdings dropped 5.27 percent to 539,000 won.
Samsung SDI went down 2.15 percent to 521,000 won, and LG Chem retreated 1.55 percent to 509,000 won.
Top-cap chip shares traded mixed.
Market bellwether Samsung Electronics rose 0.87 percent to 69,400 won on bargain hunting, but chip giant SK hynix lost 0.26 percent to 117,000 won.
Biotech firm Samsung Biologics fell 1.28 percent to 694,000 won, and Celltrion closed flat at 139,300 won.
Major platform operators also lost ground. Internet giant Naver decreased 0.72 percent to 206,500 won, and Kakao, the operator of the popular mobile messenger KakaoTalk, skidded 0.55 percent to 44,800 won.
Carmakers closed higher. Top automaker Hyundai Motor rose 0.73 percent to 192,900 won, and its affiliate Kia surged 2.37 percent to 82,100 won.
Cosmetics rose on expectations for stronger sales in the run-up to the Chinese national day holiday.
Amore Pacific spiked 2.55 percent to 124,900 won, and Kolmar Korea jumped 4.23 percent to 51,700 won.
The local currency ended at 1,336.5 won against the U.S. dollar, up 0.3 won from the previous session's close.
Bond prices, which move inversely to yields, closed mixed. The yield on three-year Treasurys remained unchanged at 3.876 percent, and the return on the benchmark five-year government bonds added 0.6 basis point to 3.927 percent.
Source: Yonhap News Agency