South Korean stocks closed lower Tuesday as foreigners and retail investors continued to offload local equities on global economic uncertainty and fluctuating oil prices, analysts said. The local currency weakened against the greenback.

The benchmark Korea Composite Stock Price Index (KOSPI) lost 4.1 points, or 0.21 percent, to 1,939.02. Trading volume was light at 295.2 million shares worth 3.26 trillion won (US$2.97 billion), with gainers beating decliners 407 to 387.

Foreigners remained net sellers for the ninth consecutive session, while institutions bought Korean stocks for the seventh trading day in a row to counterbalance some of the losses.

"Foreign investors are taking to the sidelines in the Seoul bourse as the U.S. dollar remains firm against the Korean won, as well as other major currencies, underpinned by growing expectations for the U.S. economic recovery next year," said Min Byung-kyu, an analyst at Yuanta Securities Korea Co. "There is no clear momentum because uncertainties linger in the global economy, including deepening Russian economic woes and ups and downs in crude oil prices."

The U.S. dollar edged higher against a basket of major currencies, reversing an early dip in thin pre-holiday trading.

West Texas Intermediate gained 64 cents to $55.90, while Brent crude was up 33 cents to $60.44 in Tuesday afternoon trading.

Major tech shares were down. Samsung Electronics, the nation's largest firm by market value, slipped 0.45 percent to 1,339,000 won, and chip giant SK hynix lost 1.66 percent to 47,450 won.

Top steelmaker POSCO shed 1.04 percent to 286,500 won after announcing it will inject 290 billion won into its cash-strapped industrial plant unit, together with its construction affiliate.

POSCO Plantec, which will issue new common shares via a third party allotment, briefly rose in early morning trading following the news but plunged in the afternoon, declining 6.64 percent to end at 3,165 won.

Hyundai Merchant Marine, Hyundai Group's logistics unit, tumbled 6.19 percent to 9,240 won after the debt-laden firm said it will issue 35 million new shares to raise funds to help improve its finances.

Ssangyong Motor, the local unit of Indian carmaker Mahindra & Mahindra, soared 7.51 percent to 9,740 won to extend a three-day rally after it tumbled last week on deepening economic turmoil in Russia, its major export destination.

Cheil Industries, Samsung Group's de facto holding firm, swung between gains and losses but ended 0.37 percent up at 135,000 won, narrowly extending a four-day winning streak since its listing on Thursday.

The local currency closed at 1,102.70 won against the U.S. dollar, down 6.50 won from Monday's close.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year Treasurys remained the same at 2.156 percent, and the return on the benchmark five-year government bonds fell 0.2 basis point to 2.336 percent. (Yonhap)