South Korean stocks closed nearly flat Wednesday as the market's recovery from the Paris terrorist attacks was limited by concerns over a rate hike in the United States. The local currency closed lower against the greenback.

The benchmark Korea Composite Stock Price Index edged down 0.7 point, or 0.04 percent, to 1,962.88. Trading volume was moderate at 531 billion shares worth 4.43 trillion won ($3.79 billion) with losers outpacing gainers 487 to 311.

The local stock market recovered from a brief dip earlier this week following the attacks in Paris but pared its earlier gains due to growing uncertainties over the U.S. rate hike.

"The market will face challenges in keeping its upward trend due to uncertainties from home and abroad, including the U.S. key rate issue," said Lee Young-gon, an analyst at Hana Financial Investment Co.

Foreigners offloaded a net 138.7 billion won, while retail investors bought a net 44.2 billion won. Institutions bought more shares than they sold at 15.2 billion won.

Tech shares traded mixed, with top market cap Samsung Electronics rising 0.87 percent to 1,281,000 won, while SK hynix shed 0.16 percent to 30,550 won. LG Electronics declined 1.81 percent to 54,200 won.

No. 1 carmaker Hyundai Motor climbed 0.64 percent to 158,000 won, and its auto parts affiliate Hyundai Mobis rose 3.3 percent.

Kia Motors, on the other hand, moved down 0.54 percent to 55,700 won.

Top mobile carrier SK Telecom fell 0.65 percent to 230,000 won, while No. 2 player KT added 0.35 percent to 29,000 won. LG Uplus, the smallest player, suffered a 3.3 percent drop to 10,250 won.

Builders closed bearish, with Hyundai Engineering & Construction falling 2.37 percent to 30,900 won and Daewoo Engineering & Construction losing 1.44 percent to 6,180 won. Daelim Industrial declined 0.85 percent to 70,000 won.

The local currency ended at 1,170.20 won against the greenback, down 1.8 won from Tuesday's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys lost 0.6 basis point to 1.752 percent and the return on the benchmark five-year government bonds shed 1.1 basis points to 1.964 percent. (Yonhap)