South Korean stocks fell 0.49 percent Friday, snapping the latest streak of bullish runs as investors opted to take profit while taking a breather ahead of the holiday season and a key policy event in the U.S., analysts said.

The local currency inched down against the U.S. dollar. 

The benchmark Korea Composite Stock Price Index (KOSPI) retreated 9.74 points to close at 1,994.32. Trading volume was light at 247.4 million shares worth 3.94 trillion won ($3.62 billion) with decliners outnumbering gainers 467 to 316.

Analysts said recent sharp rallies weighed down the index. The KOSPI has soared 3.52 percent over the last six sessions, reaching a three-month high on Wednesday. 

Investors chose to take a wait-and-see approach ahead of Chuseok, the national harvest holiday, next week as they anxiously await the U.S. monetary policy meeting slated for Sept. 18, U.S. time, they added.

"Wary investors unloaded their stock holdings, putting downward pressure on the KOSPI. But the index managed to attract a solid net foreign buying, leaving positive signals," said Kim Hyung-ryeol, an analyst at Kyobo Securities Co.

Foreigners scooped up a net 396.9 billion won, while retail and institutional investors offloaded nearly 400 billion won.

The overall decline came from bearish steelmakers and food manufacturers, with Hyundai Steel, the country's No. 2 player, dipping 3.27 percent to 79,800 won.

Orion, a major confectionery maker, tumbled 4.42 percent to 930,000 won, after local media reported its owners may provide their stakes in the firm as collateral to help the troubled former parent company Tong Yang Group repay their debts.

Large-caps finished mixed. Tech giant Samsung Electronics edged down 0.28 percent to 1,406,000 won whereas top automaker Hyundai Motor rose 0.2 percent to 248,500 won.

The local currency chopped its earlier gains against the greenback to end at 1,087.00 won, down 2.0 won from Thursday's close, largely due to investors' dollar purchases, dealers said. (Yonhap News)