South Korean stocks sank 1.12 percent Wednesday as better-than-expected economic data from the United States revived woes that its central bank may scale back a massive stimulus measure in the near future, analysts said. The local currency gained against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) shed 22.56 points to 1,986.80. Trading volume was low at 226 million shares worth 3.57 trillion won ($3.36 billion) with losers outpacing gainers 521 to 283.

Analysts said Seoul shares lost ground as the latest U.S. manufacturers' data showed signs of an economic recovery, sparking concerns that the Federal Reserve may soon commence an early tapering of its quantitative easing.

The U.S. Institute for Supply Management (ISM) index, a key barometer of the country's manufacturing activity, came to 57.3 in November, hovering far above the market expectation of 55.

"Investors will remain concerned until the next Federal Open Market Committee meeting slated for Dec. 18," said Lee Sang-jae, a researcher at Hyundai Securities Co.

Analysts, however, added investors were silent over the latest report on a possible power shift in North Korea, as the local stock market became indifferent to such geopolitical issues.

North Korean leader Kim Jong-un's uncle, Jang Song-thaek, has likely been removed from power, South Korea's spy agency said Tuesday, a development that could cause a shift in power and heighten uncertainty within the communist country.

Foreigners sold a net 403.2 billion won worth of Seoul shares on the main bourse. Institutions and individuals, on the other hand, scooped up a net 308 billion won and 86.8 billion won, respectively.

Tech shares traded lower, with No. 1 Samsung Electronics moving down 1.98 percent and its rival LG Electronics falling 0.9 percent.

Flat panel maker LG Display shed 2.31 percent.

Shipbuilders lost ground, with Hyundai Heavy Industries moving down 3.4 percent and Samsung Heavy Industries losing 1.55 percent.

Daewoo Shipbuilding & Marine Engineering declined 3.66 percent.

Mobile carriers traded bearish, with SK Telecom moving down 1.97 percent and No. 2 player KT decreasing 0.49 percent. LG Uplus, the smallest player, shed 4.76 percent.

The local currency ended at 1,060.50 won to the U.S. dollar, up 0.70 won from Tuesday's close, dealers said. (Yonhap News)