South Korean stocks dipped 1 percent on Wednesday as foreign investors offloaded local stocks to cash in recent gains ahead of the US Federal Open Market Committee (FOMC) meeting. The Korean won fell against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 33.95 points, or 1.06 percent, to close at 3,181.47 points.

Trading volume was moderate at about 1.4 billion shares worth some 18 trillion won ($16.2 billion), with losers outnumbering gainers 699 to 193.

Foreigners sold a net 608 billion won, while retail investors purchased 1.1 trillion won. Institutions offloaded a net 429 billion won.

The KOSPI came to a weak start as investors took a wait-and-see approach, waiting for the results of the FOMC's meeting, which will come out later in the day.

The yield rate of the US 10-year Treasury bounced back above the 1.6 percent level amid expectations of a faster-than-expected global recovery from the pandemic.

"Foreigner investors seem to have sold local stocks over concerns that the KOSPI's steep gains this month could lead to high volatility in May, when the ban on short selling would be lifted," Bookook Securities analyst Lee Won said.

"The April FOMC meeting results also drove investors into their wait-and-see mode," he said.

In Seoul, top cap Samsung Electronics lost 0.97 percent to 82,100 won, and No. 2 chipmaker SK hynix dipped 3.7 percent to 130,000 won.

Giant internet portal operator Naver retreated 1.71 percent to 373,500 won, and its rival Kakao moved down 1.65 percent to 119,500 won.

Pharmaceutical giant Samsung Biologics declined 1.98 percent to 791,000 won, and leading chemical firm LG Chem slipped 0.11 percent to 890,000 won. Top automaker Hyundai Motor gained 0.68 percent to 221,500 won.

The local currency closed at 1,113.0 won against the US dollar, down 2.6 won from the previous session's close. (Yonhap)