South Korean stocks retreated 0.76 percent Thursday as U.S. Federal Reserve Chair Janet Yellen reinforced expectations of an interest rate hike later this month. The local currency fell against the U.S. dollar for the third consecutive day.
  

The benchmark Korea Composite Stock Price Index lost 15.22 points to 1,994.07. Trade volume was slim at 360.92 million shares worth 3.17 trillion won ($2.72 billion), with losers outpacing gainers 475 to 333.
  

Analysts said investors remain cautious ahead of big events, such as the European Central Bank's two-day policy meeting and U.S. Federal Reserve's rate-decision meeting.
  

The ECB is expected to deliver a variety of quantitative easing measures later that could include a deposit rate cut and changes to its asset-buying program in a bid to fight low inflation in an upcoming meeting later in the day.
  

U.S. stocks fell on Wednesday after Yellen said she was "looking forward" to a U.S. interest rate rise that will be seen as a testament to the economy's robust recovery from recession.
  

"Yellen's speech reinforced market expectations for a December rate hike, which could weigh down on equities," Kim Sung-hwan, an analyst at Bookook Securities, said. "While the U.S. dollar is holding a strong ground, foreign-led selling is expected to continue for a while."
  

Large stocks across the board remained in negative terrain as foreign investors and institutions offloaded them.
  

Tech shares slipped on growing concerns that Korean phonemakers are faced with tougher competition from low-cost Chinese handsets and Apple's iPhones in the high-end segment.
  

Samsung Electronics, the world's top handset maker, shed 0.77 percent to 1,290,000 won, and No. 2 tech giant LG Electronics decreased 2.6 percent to 52.500 won.
  

Cosmetic shares dipped as investors locked in recent gains.
  

AmorePacific, the nation's leading cosmetic maker, went down 2.46 percent to 415,500 won, and LG Household & Health Care declined 3.76 percent to 998,000 won.
  

The local currency ended at 1,164.6 won against the greenback, down 0.3 won from Wednesday's close.
  

Bond prices, which move inversely to yields, closed mixed. The yield on three-year Treasurys fell 0.7 basis point to 1.755 percent and the return on the benchmark five-year government bonds gained 0.4 basis point to 1.981 percent. (Yonhap)