South Korean stocks finished lower Monday as investors remained cautious about the United States' monetary policy direction ahead of a rate-setting meeting amid deepening recession fears. The local currency fell against the US dollar.

The benchmark Korea Composite Stock Price Index lost 16.02 points, or 0.67 percent, to close at 2,373.02.

Trading volume was a bit light at 489.54 million shares worth 5.72 trillion won ($4.37 billion), with decliners outstripping gainers 486 to 363.

Institutions and retail investors sold a net 44.14 billion won and 500 million won worth of shares, respectively, while foreigners bought 18.22 billion won worth of shares.

"Major market-moving events are due this week, which is expected to increase market volatility as investors have sought future market direction," Kiwoom Securities analyst Han Ji-young said.

The market opened lower and had been under heavy downward pressure, as investors were awaiting key US inflation data and the Federal Reserve's rate-setting meeting.

The Federal Reserve is widely expected to downshift to a 50-basis point hike from its previous 75 basis point increases after a two-day rate-setting meeting set to start Tuesday.

But Chair Jerome Powell has stressed the need to maintain aggressive tightening for the time being to curb inflation, deepening concerns over a global economic downturn. He plans to have a news conference on Wednesday.

The US consumer inflation data will be available Tuesday, which will show whether inflation recedes. November's producer price index rose 0.3 percent on-month, more than expected on high food prices, according to US government data.

In Seoul, most major stocks lost ground, with big-cap tech shares hit harder.

Market behemoth Samsung Electronics shed 1.49 percent to 59,500 won, and chip giant SK hynix lost 0.49 percent to 81,100 won on gloomy forecast for their fourth-quarter performance.

Battery maker LG Energy Solutions dropped 2.52 percent to 502,000 won.

Bio shares also lost ground, with Samsung Biologics decreasing 1.45 percent to 815,000 won and Celltrion falling 2.22 percent to 176,500 won.

Portal operator Naver lost 1.03 percent to 193,000 won, and messenger app operator Kakao remained flat at 58,100 won.

But carmakers ended mixed. Top automaker Hyundai Motor went up 0.62 percent to 163,500 won, while its affiliate Kia inched down 0.15 percent to 65,100 won.

Among gainers, No. 1 chemical firm LG Chem went up 0.16 percent to 628,000 won and Samsung SDI jumped 0.78 percent to 650,000 won.

The Korean won ended at 1,307.2 won against the US dollar, down 5.9 won from the previous session's close. (Yonhap)