South Korean stocks retreated more than 1 percent Friday as concerns about the possibility of the US Fed's earlier-than-expected tapering pulled down the stock prices. The Korean won fell against the US dollar.

The benchmark Korea Composite Stock Price Index (Kospi) dipped 37.32 points, or 1.2 percent, to close at 3,060.51 points.

Trading volume was moderate at about 660 million shares worth some 16.1 trillion won ($13.6 billion), with gainers outnumbering losers 829 to 70.

Foreigners sold a net 257 billion won, and institutions offloaded a net 16 billion won, while retail investors bought 274 billion won.

Stocks opened with mild gains after the Kospi retreated nearly 2 percent Thursday, marking the biggest daily loss since Feb. 26 and the lowest closing price since early April.

But stocks fell back below the 3,200-point mark in the late morning, largely on market jitters that the Federal Reserve may start tapering its accommodative policies and raise policy interest rates as early as the final quarter this year.

The Kospi further deepened losses as China froze its benchmark one-year loan prime rate (LPR). The Chinese key lending rate had been widely expected to decrease amid weak economic data.

"The Chinese rate freeze against consensus drove down the Asian stock indexes, and the US tapering issues weakened the investors' sentiment," Mirae Asset Securities analyst Park Gwang-nam said.

In Seoul, market kingpin Samsung Electronics lost 0.55 percent to 72,700 won, and No. 2 chipmaker SK hynix closed unchanged at 102,500 won.

Internet portal operator Naver declined 0.47 percent to 422,500 won, and pharmaceutical giant Samsung Biologics gained 1.13 percent to 986,000 won.

Top automaker Hyundai Motor retreated 2.42 percent to 201,500 won, but leading chemical firm LG Chem climbed 0.45 percent to 898,000 won.

The local currency closed at 1,179.6 won to the US dollar, down 3.4 won from the previous session's close. (Yonhap)