Seoul: Seoul shares closed sharply lower Tuesday as investors cashed in on recent gains amid uncertainties surrounding U.S. tariff policies and upcoming corporate earnings. The Korean won rose against the U.S. dollar. The benchmark Korea Composite Stock Price Index (KOSPI) fell 40.87 points, or 1.27 percent, to close at 3,169.94.

According to Yonhap News Agency, trade volume was moderate at 375.19 million shares, valued at 11.39 trillion won (US$8.2 billion), with losers outnumbering winners 686 to 208. Institutional and foreign investors sold stocks worth 413.94 billion won and 160.97 billion won, respectively, while individuals purchased a net 511.44 billion won in shares.

"Institutions and foreigners turned net sellers after buying local stocks for the past three and eight sessions, respectively, weighing on the market," said Lee Jae-won, an analyst at Shinhan Securities Co. In contrast, retail investors turned net buyers after selling for the previous three sessions.

All eyes are on potential changes to U.S. tariff policies, as President Donald Trump may announce new unilateral tariffs before August 1, analysts noted. Investors are also anticipating second-quarter corporate earnings, due this week, for insights into the market's direction.

In Seoul, most large-cap stocks declined. Market bellwether Samsung Electronics fell 2.65 percent to 66,000 won, and smaller chipmaking rival SK hynix declined 1.47 percent to 268,500 won. Top carmaker Hyundai Motor dropped 1.2 percent to 206,500 won, leading shipbuilder HD Hyundai shed 0.8 percent to 136,100 won, and No. 1 steelmaker POSCO Holdings lost 1.22 percent to 323,000 won.

Among gainers, leading battery maker LG Energy Solution rose 0.76 percent to 333,500 won, and LG Chem climbed 0.7 percent to 289,000 won. Leading wireless services provider SK Telecom gained 1.07 percent to 56,500 won, and state-run utility firm Korea Electric Power Corp. was up 0.27 percent to 37,250 won.

The local currency was quoted at 1,387.80 won against the U.S. dollar at 3:30 p.m., up 0.4 won from the previous session.