SEOUL, Aug. 7 (Yonhap) -- South Korean stocks dropped 1.48 percent Wednesday, as investors again awoke to the fact that the U.S. central bank will soon start winding down its stimulus scheme, analysts said. The local currency fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) slid 28.29 points to close at 1,878.33. Trading volume was moderate at 307.7 million shares worth 3.49 trillion won (US$3.12 billion) with decliners far outstripping gainers 550 to 256.
"Concern on reduction of the U.S. monetary easing that resurfaced this week has sapped investor sentiment," said Lee Aram, an analyst at NH Investment & Securities Co.
U.S. stocks finished lower on Tuesday after the Chicago Federal Reserve Bank's president, Charles Evans, said the Fed will begin tapering its monthly bond purchase within this year for a complete closure by mid-2014.
Auto and tech blue-chips drove down the country's main index. Industry leader Hyundai Motor slumped 3.23 percent to 225,000 won, with its smaller affiliate Kia Motors falling 3.66 percent to 60,500 won.
Top-cap Samsung Electronics sank 2.55 percent to 1,222,000 won, and chip giant SK hynix dropped 3.63 percent to 26,550 won.
Foreigners sold off a net 146.4 billion won on the main bourse, extending their losing streak for the second consecutive session. In contrast, retail investors bought a net 204.5 billion won.
The local currency ended at 1,118.70 won against the greenback, down 3.2 won from Tuesday's close, mainly due to the KOSPI's fall, dealers said.
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasuries rose 0.02 percentage point to 2.94 percent and the return on the benchmark five-year government bonds gained 0.05 percentage point to 3.25 percent.