Seoul: South Korean stocks fell slightly Tuesday, snapping a two-session winning streak, as investors grew cautious over the U.S. central bank's monetary policy path despite a widely expected rate cut at its upcoming meeting. The local currency declined sharply against the U.S. dollar. The benchmark Korea Composite Stock Price Index (KOSPI) lost 11.3 points, or 0.27 percent, to close at 4,143.55, following gains of 1.34 percent and 1.78 percent in the previous two sessions.

According to Yonhap News Agency, trade volume was moderate at 397.3 million shares worth 13.2 trillion won (US$9 billion), with losers outpacing gainers 473 to 401. Foreigners dumped a net 91.2 billion won worth of local shares and individuals offloaded a net 11.1 billion won, far offsetting the net purchase of institutions worth 49.4 billion won.

Analysts mentioned that markets are widely anticipating a rate cut at the two-day Federal Open Market Committee (FOMC) meeting that begins Tuesday (U.S. time), but investor sentiment remained subdued on concerns that the Fed may slow the pace of monetary easing. "About 87.3 percent expects a rate cut at the December FOMC," said Kang Jin-hyeok, an analyst at Shinhan Securities. "But divisions among Fed members over the pace of future monetary policy have heightened uncertainties."

In Seoul, semiconductor and auto shares led the daily decline. Chip giant Samsung Electronics retreated 1 percent to 108,400 won, and its rival SK hynix fell 1.91 percent to 566,000 won. Top carmaker Hyundai Motor slumped 2.69 percent to 307,000 won, and its sister Kia dropped 1.43 percent to 123,800 won.

Leading battery maker LG Energy Solution decreased 1.77 percent to 443,500 won, and major builder Hyundai Engineering and Construction declined 1.62 percent to 72,900 won. Internet giant Kakao skidded 1.94 percent to 60,800 won, and Hana Financial Group slipped 1.06 percent to 93,000 won.

However, defense titan Hanwha Aerospace added 2.45 percent to 960,000 won, and leading bio tech firm Samsung Biologics rose 1.9 percent to 1.66 million won. The local currency was quoted at 1,472.3 won against the greenback at 3:30 p.m., down 5.4 won from the previous session.