South Korean stocks closed 1.31 percent lower Friday due to the rising concerns over listed firms' first-quarter earnings, analysts said. The local currency closed flat against the greenback.

The benchmark Korea Composite Stock Price Index (KOSPI) shed 25.57 points to finish at 1,924.23. Trading volume was moderate at 399.7 million shares worth 4.9 trillion won ($4.34 billion) with decliners outpacing gainers 417 to 393.

"The local stock market lost ground due to the rising concerns over the first-quarter earnings of listed firms, sparked by the lower-than-expected performances of GS Engineering & Construction," said Lim Soo-kyun, an analyst at Samsung Securities Co.

GS Engineering, South Korea's fourth-largest builder, said Wednesday that it swung to a net loss in the first three months of this year due to lower margins on overseas deals.

Net loss reached 386 billion won in the first three months through March 31, a sharp decline from a profit of 74.6 billion won a year earlier, the company said in a regulatory filing.

"Meanwhile, the decline was limited due to eased concerns over the North Korean risks," Lim added.

Foreigners offloaded a net 46.8 billion won, and institutions also sold a net 229 billion won. In contrast, retail investors scooped up a net 296 billion won.

Construction firms closed lower due to the gloomy outlook on the industry, with Hyundai Engineering & Construction falling 1.71 percent to 57,600 won. GS Engineering fell by the daily permissible limit of 15 percent to 35,700 won.

Tech blue chips also declined, with market behemoth Samsung Electronics falling 1.49 percent to 1,517,000 won, and its smaller rival LG Electronics losing 1.62 percent to 85,200 won.

Mobile carriers also traded lower, with SK Telecom moving down 1.71 percent to 172,000 won, and No. 2 player KT losing 2.3 percent to 34,000 won. LG Uplus edged down 0.12 percent to 8,480 won.

Hyundai Mobis, the country's leading auto parts marker, shed 6.63 percent to 274,500 won, as the firm is expected to post weak earnings through the second quarter.

In contrast, NHN, the operator of South Korea's most visited Web portal, soared 4.29 percent to 292,000 won on rosy prospects for its mobile messenger service LINE.

Food makers also closed higher, with industry leader CJ Cheiljedang rising 0.15 percent to 326,000 won and Nongshim, South Korea's No. 1 instant noodle maker, adding 3.8 percent to 327,500 won.

The local currency ended at 1,129.10 won against the greenback, remaining unchanged won from Thursday's close, as the concerns over North Korea were curbed by improved economic indicators from the United States, dealers said.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasuries advanced 0.04 percentage point to 2.67 percent and the return on the benchmark five-year government bonds also added 0.04 percentage point to 2.76 percent. (Yonhap News)