South Korean stocks closed almost flat Tuesday, as continued foreign inflow offset concerns about the U.S. government's shutdown, analysts said. The local currency edged up against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) added 1.91 points, or 0.1 percent to finish at 1,998,87. Trading volume was light at 275.0 million shares worth 3.84 trillion won ($3.57billion) with decliners far outpacing gainers 508 to 302.

The main index started off a tad higher, and bobbed in and out of positive territory as the Obama administration began a partial shutdown on its public operations as of 1:00 p.m., Seoul time, due to a deadlock in its budget negotiation with the Republican-led House.

Analysts said jitters over the U.S. government's shutdown has been already reflected in the market, as historically similar cases in the past only created a short-term negative impact.

"The market is ready to deal with a one-off downturn (from the shutdown). Risks lie more on how the U.S. will deal with its debt ceiling, which entails default risks, even though we expect Washington won't allow it to happen," said Lim Dong-min, an analysts at Kyobo Securities Co.

Foreigners kept their interest in local equities, snapping up a net 149.3 billion won, while retail investors offloaded a net 149 billion won.

Gains in large-cap tech and auto companies drove up the KOSPI.

Market behemoth Samsung Electronics rose 1.1 percent to 1,382,000 won and top player Hyundai Motor shot up 1.39 percent to 254,500 won.

But POSCO, the country's No. 1 steelmaker, and Hyundai Heavy Industries, the world's biggest shipyard, fell 2.19 percent to 312,500 won and 1.52 percent to 260,000 won.

Shares of Tongyang Cement & Energy, the second-largest cement producer affiliated with debt-saddled Tong Yang Group, advanced 2.39 percent to 2,360 won after the company said it filed for court receivership earlier in the day.

The local currency ended at 1,073.50 won against the greenback, up 1.2 won from Monday's close, largely due to a weaker dollar following the government shutdown, dealers said. (Yonhap News)