South Korean ended its three-day winning streak Thursday as the central bank delivered its first pandemic-era rate hike. The Korean won fell against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) retreated 18.28 points, or 0.58 percent, to close at 3,128.53 points.

Trading volume was moderate at about 719 million shares worth some 13.2 trillion won ($11.3 billion), with losers outnumbering gainers 488 to 349.

Foreigners sold a net 363 billion won, while retail investors bought 441 billion won. Institutions offloaded a net 82 billion won.

The KOSPI got off to a solid start as investors expect the Fed not to hurry its timeline to roll back its stimulus amid surging new coronavirus cases.

Fed Chairman Jerome Powell is scheduled to deliver his remarks virtually Friday (US time) at the Fed's annual Jackson Hole gathering.

The Bank of Korea (BOK) delivered its first pandemic-era rate hike earlier in the day to control inflation and household debt, ending 15 months of record low interest rates, citing signs of an improving economic recovery.

"The BOK's rate hike seems more like a way of coping with the bubbles in the asset markets, inflation and foreign exchange, rather than a sign of an actual economic rebound," Samsung Securities analyst Kim Yong-koo said.

In Seoul, market bellwether Samsung Electronics slumped 1.45 percent to 74,600 won, while No. 2 chipmaker SK hynix increased 0.48 percent to 104,000 won.

Internet portal operator Naver declined 1.63 percent to 423,500 won, and giant pharmaceutical firm Samsung Biologics lost 0.93 percent to 954,000 won.

Top automaker Hyundai Motor gained 0.24 percent to 210,000 won, but leading chemical firm LG Chem declined 1.38 percent to 788,000 won. Top bank stock Kakao Bank advanced 1.58 percent to 83,400 won.

The local currency closed at 1,170.5 won against the US dollar, down 2.4 percent from the previous session's close. (Yonhap)