South Korean stocks closed almost flat Thursday as concerns over a possible default of the United States government dented investor sentiment, analysts said. The local currency gained against the U.S. dollar.

The benchmark Korea Composite Stock Price Index shed 1.36 points, or 0.07 percent, to finish at 2,001.40. Trading volume was low at 218.7 million shares worth 3.85 trillion won ($3.58 billion) with losers outpacing gainers 459 to 324.

Analysts said Seoul shares closed flat as the congressional impasse in the U.S. continued to dent investor sentiment amid the rising woes that its government could face a first-ever default soon.

The U.S. government headed into its first shutdown in 17 years on Oct. 1, keeping only essential services intact, after Congress failed to pass a spending bill for the fiscal year of 2014 amid disputes over the controversial health care reform.

“The benchmark KOSPI will remain around the 2,000-mark down the road and take a leap when the U.S. political tension is eased,” said Kim Hak-gyun, an analyst at KDB Daewoo Securities.

Analysts added the decline was limited after reports that U.S. President Barack Obama will select Janet Yellen to head the Federal Reserve after its current head Ben Bernanke finishes his term, which abated uncertainties over its tapering of quantitative easing. (Yonhap News)