Korean shares trimmed earlier gains to close marginally lower Wednesday as institutional investors locked in recent gains. The local currency rose against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) shed 0.27 percent, or 5.53 points, to 2,005.83. It retreated after hitting an intraday high of 2,023.77, the highest intraday figure so far this year.

Trade volume stood at a moderate 419.04 million shares worth 4.53 trillion won (4 billion), with decliners outnumbering advancers 400 to 392.

Institutions and individuals sold a combined 99 billion won worth of domestic shares on profit taking, while foreigners bought a net 108.92 billion won.

The American Petroleum Institute (API) reported a growth of 3.1 million barrels in U.S. crude inventory, far higher than the market forecast of 640,000 barrels. Moreover, oil prices in Asia fell by more than 2 percent during trading hours. The news sent Asian stocks mostly lower on Wednesday, analysts said.

"In the afternoon trade, oil turned into the main negative driver for Asian stocks. The next focus will be on earnings reports from major firms in coming weeks," Hong Chun-uk, an analyst with Kiwoom Securities, said.

Heavyweight stocks closed mostly lower, with top automaker Hyundai Motor shedding 0.98 percent to 151,500 won, cosmetics giant AmorePacific dropping 1.97 percent to 398,500 won and No. 1 refiner SK Innovation declining 2.14 percent to 160,000 won. 

In contrast, top market cap Samsung Electronics ended up 0.85 percent at 1,299,000 won and industry leader Hana Financial Group climbed 2.80 percent to 25,700 won and state-run utility Korea Electric Power Corp. gained 0.67 percent at 59,900 won. 

On Tuesday (local time), the Dow Jones industrial average closed up 0.27 percent to 18,053.60 points, while the Nasdaq Composite index ended 0.40 percent lower at 4,940.33 points.

Korea's won closed at 1,135.20 against the greenback, up 1.10 won from the previous session's close. (Yonhap)