South Korean stocks fell 0.26 percent on Monday as investors took profits from recent gains powered by the U.S. bond-buying program, analysts said. The local currency rose against the U.S. dollar.

The benchmark Korea Composite Stock Price Index declined 5.23 points to 2,002.35, the first loss in four sessions.

Trading volume was heavy at 871.3 billion shares worth 6.5 trillion won ($5.83 billion). But gainers outnumbered losers 458 to 359.

“Investors took a breather after the previous session‘s rally driven by the U.S. central bank’s plan to buy bonds,” said Kwak Joong-bo, a market analyst at Samsung Securities Co.

Seoul shares rallied 2.92 percent to a five-month high on Friday on the back of the Federal Reserves‘ stimulus measures and an upgrade of South Korea’s credit rating by Standard & Poor‘s.

The Fed pledged last week to pump $40 billion every month into the U.S. economy by buying mortgage-backed securities in its third round of quantitative easing. S&P’s upgrade led South Korea to gain upgrades on its sovereign rating by all three major global credit appraisers.

Analysts said that the Fed‘s QE3 is likely to stoke investors’ appetite for risky assets, raising risks of inflation and giving strength to currencies in emerging countries.

Despite the KOSPI‘s fall, foreign investors remained net buyers of local stocks by picking up a net 496.2 billion won on the bourse.

The local currency ended at 1,115.95 won to the greenback, up 1.25 won from Friday’s close, as foreign investors scooped up local stocks, dealers said.

(Yonhap News)