South Korean stocks closed lower Tuesday after strong gains in the previous session and mixed overnight results on Wall Street. The local currency rose against the US dollar.

The benchmark Korea Composite Stock Price Index fell 20.42 points, or 0.76 percent, to close at 2,662.10.

Trade volume was heavy at 759.2 million shares worth 12.5 trillion won ($9.07 billion), with losers far outpacing gainers 642 to 226.

Foreigners and institutions dumped shares worth a net 516 billion won, while individuals snapped up 520 billion won worth of shares.

The Kospi rallied 1.74 percent Monday as investors' sentiment was boosted by favorable economic data that could lead to a rate cut in the United States.

Overnight, Wall Street shares finished mixed amid the latest economic indicators showing a slowing of the US economy. The Dow Jones Industrial Average fell 0.3 percent, while the Nasdaq composite gained 0.6 percent and the S&P 500 edged up 0.1 percent.

"Concerns about an economic slowdown due to weak indicators and anticipations of interest rate cuts have extended the mixed results in the US stock market," Kim Ji-won, an analyst at KB Securities, said.

She added, "It is necessary to approach investment with caution and prepare for increased volatility."

In Seoul, most blue chips lost ground, with market heavyweight Samsung Electronics falling 0.53 percent to 75,300 won and chip rival SK hynix sliding 0.46 percent to 193,300 won.

Financial shares also lost ground, with KB Financial losing 2.14 percent to 77,600 won and Shinhan Financial slumping 3.4 percent to 45,400 won.

In contrast, battery and pharmaceutical stocks advanced. Top battery manufacturer LG Energy Solution climbed 1.36 percent to 336,500 won, and pharmaceutical giant Celltrion gained 5.08 percent to end at 188,100 won.

The local currency closed at 1,376 won against the US dollar, up 0.1 won from the previous session's close. (Yonhap)