Seoul: South Korean stocks closed lower on Monday, ending a three-day upward streak as investors remained cautious ahead of an upcoming U.S. Federal Reserve rate-setting meeting. This caution was further compounded by geopolitical uncertainties surrounding Iran. Meanwhile, the tech-heavy KOSDAQ index experienced a significant surge, climbing over 7 percent to surpass the 1,000 mark for the first time in more than four years.

According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) decreased by 40.48 points, or 0.81 percent, closing at 4,949.59. Despite a strong performance this year, the KOSPI has yet to close above the 5,000-point threshold, where it had been hovering since last Thursday. The trade volume was moderate, with 438 million shares exchanging hands at a value of 22.5 trillion won (approximately US$15.6 billion). Market breadth favored gainers, with 502 stocks rising compared to 391 decliners.

Institutional and foreign investors were net sellers, offloading 158.4 billion won and 1.54 trillion won worth of shares, respectively. In contrast, individual investors were net buyers, acquiring 1.71 billion won in stocks. Analysts noted that investors were adopting a cautious stance due to several events scheduled for the week, including the Federal Reserve's rate decision and fourth-quarter earnings reports from major companies like Samsung Electronics and SK hynix. Additionally, geopolitical tensions involving the United States, Iran, and Greenland influenced market sentiment.

Han Ji-young, a researcher at Kiwoom Securities, mentioned that the positive outlook for semiconductor shares' fourth-quarter earnings had already been factored into recent gains. Han advised investors to pay attention to upcoming corporate conference calls, which are expected to reveal plans for HBM4 chips and general-purpose memory supply.

In the stock market, Samsung Electronics remained unchanged at 152,100 won, while SK hynix dropped by 4.04 percent to 736,000 won. Among automakers, Hyundai Motor saw a decline of 3.43 percent, closing at 492,500 won, and Kia also fell 3.51 percent to 155,200 won. Financial stocks were not spared, with KB Financial dipping 0.07 percent to 135,500 won and Shinhan Financial decreasing by 1.79 percent to 82,400 won.

Conversely, the secondary KOSDAQ index rose sharply by 7.09 percent, marking a return above the 1,000 level after more than four years. On the currency front, the Korean won strengthened against the U.S. dollar, quoted at 1,440.6 won per dollar by 3:30 p.m., reflecting an increase of 25.2 won from the previous session. In the bond market, prices rose, pushing yields lower. The yield on three-year Treasurys decreased by 4.1 basis points to 3.096 percent, while the yield on five-year government bonds fell by 3.8 basis points to 3.382 percent.