Seoul stocks retreat from record-breaking streak ahead of major events

The closing benchmark Korea Composite Stock Price Index (KOSPI) is displayed on a screen inside the Hana Bank in central Seoul, Tuesday. Yonhap

Korean stocks took a breather on Tuesday after enjoying a stellar performance over the past weeks, as investors cashed in part of jaw-dropping gains ahead of major events, such as the Trump-Xi meeting and the Federal Reserve's rate decision. The local currency fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) slid 32.42 points, or 0.8 percent, to close at 4,010.41.

The index has been on a bull run since late September as investors snatched up major stocks such as tech, defense and shipbuilders.

The KOSPI has gained around 68 percent so far this year. Since September, the index spiked over 23 percent, and this month alone, the market barometer surged around 15 percent.

On Monday, the KOSPI broke through 4,000 threshold for the first time after exceeding 3,500 early this month.

Trade volume was moderate at 405.3 million shares worth 19.5 trillion won ($ 13.6 billion). Losers outnumbered winners 499 to 379.

Foreigners were net sellers, offloading 1.6 trillion won. Retail and institutional investors purchased a net 1.6 trillion won and 92.6 billion won, respectively.

"The KOSPI took a breather after reaching a record high the previous session, as investors either locked up profits or took to the sidelines as major events such as the U.S.-China summit meeting neared," said Lee Kyoung-min, an analyst from Daishin Securities.

Investors are closely watching the upcoming meeting between President Lee Jae Myung and U.S. President Donald Trump on Wednesday, where the two leaders are expected to hash out details of Korea's $350 billion investment pledge to the United States.

The Fed is also scheduled to hold a rate-setting meeting later this week, another key event for investors.

In Seoul, most large cap shares ended lower.

Market bellwether Samsung Electronics dipped 2.45 percent to 99,500 won, while its rival SK hynix fell 2.62 percent to 521,000 won. SK hynix is scheduled to announce its third-quarter earnings results on Wednesday.

Top carmaker Hyundai Motor retreated 1.57 percent to 250,500 won, defense giant Hanwha Aerospace dipped 4.14 percent to 996,000 won, and KB Financial Group fell 1.36 percent to 116,400 won.

In contrast, battery makers and IT shares gathered ground.

Battery maker LG Energy Solution added 3.03 percent to 510,000 won, and messenger app operator Kakao rose 4.6 percent to 63,700 won.

The Korean won was quoted at 1,437.7 won against the U.S. dollar as of 3:30 p.m., down 6 won from the previous session's close.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year Treasurys rose 1.3 basis points to 2.633 percent, and the return on the benchmark five-year government bonds inched down 0.5 basis point to 2.751 percent.