South Korean stocks closed nearly flat Thursday as investors took a wait-and-see stance awaiting the outcome of a key U.S. Fed policy meeting due later this week. The local currency gained against the U.S. dollar.

The benchmark Korea Composite Stock Price Index edged up 1.04 points, or 0.05 percent, to close at 1,976.49. Trading volume was moderate at 502.1 million shares worth 5.55 trillion won ($4.76 billion), with losers outpacing advancers 477 to 333.

The Federal Open Market Committee started a two-day rate-setting meeting on Wednesday (local time), with some betting that the Fed may delay its first rate hike in almost a decade.

"The rising outlook over the delay of a rate hike led to overnight gains on the U.S. stock market," said Lee Kyung-min, an analyst from Daishin Securities Co. "But the gains are curbed as such prospects are factored in."

Foreigners scooped up a net 127.3 billion won, while retail investors offloaded a net 270 billion won. Institutions bought a net 131.2 billion won.

Tech shares traded mixed, with market behemoth Samsung Electronics adding 0.43 percent to 1,157,000 won and top chipmaker SK hynix advancing 2.99 percent to 36,150 won. LG Electronics lost 0.21 percent to 46,900 won.

Mobile carriers also closed mixed, with No. 3 LG Uplus losing 2.48 percent to 11,800 won, while KT gained 0.51 percent to 29,850 won. SK Telecom closed flat at 257,500 won.

No. 1 carmaker Hyundai Motor moved up 0.31 percent to 163,500 won, and Kia Motors decreased 0.38 percent to 52,700 won. Hyundai Mobis lost 2.74 percent to 213,000 won.

Hyundai Engineering & Construction moved up 2.62 percent to 37,150 won, and Daewoo Engineering & Construction increased 3.63 percent to 6,570 won. Daelim Industrial added 0.97 percent to 72,500 won.

The local currency ended at 1,165.90 won against the greenback, up 10.00 won from Wednesday's close.

Bond prices, which move inversely to yields, ended lower. The yield on three-year Treasurys rose 1.3 basis points to 1.683 percent, and the return on the benchmark five-year government bonds gained 0.3 basis point to 1.903 percent. (Yonhap)