Korean stocks closed 0.29 percent lower on Tuesday as investors scaled back holdings in automakers on concerns over their third-quarter earnings, analysts said. The local currency fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index fell 5.58 points to 1,907.13. Trading volume was heavy at 868.2 million shares worth 4.5 trillion won ($4 billion), with decliners outnumbering gainers 423 to 395.

The loss was largely attributed to falls in auto shares.

Industry data showed that the country’s two biggest carmakers Hyundai Motor Co. and Kia Motors Corp. are likely to suffer a supply shortage stemming from frequent strikes in August.

Analysts also said investors were awaiting market signals, such as developments in the eurozone debt crisis and economic data from the United States.

“Investors are reluctant to take clear positions ahead of the European Central Bank meeting later this week. Moreover, they are also waiting on manufacturing and jobs data from the U.S.” said Han Chi-hwan, an analyst at KDB Daewoo Securities Co.

Autos led the market decline. Hyundai Motor lost 2.28 percent to 236,000 won and its auto-parts affiliate Hyundai Mobis slumped 3.03 percent to 304,000 won.

Industry data showed that Hyundai sold 89,000 vehicles at home in August, down 31 percent from the previous year. Sales by Kia Motors fell 12.7 percent on-year to 95,000 units last month.

Unionized workers of the carmakers staged costly strikes last month, demanding shorter working hours and higher wages.

Insurers also ended bearish, with top player Samsung Life Insurance losing 1.15 percent to 94,700 won.

In contrast, shipbuilders closed higher. Leading shipbuilder Hyundai Heavy Industries added 1.07 percent to 236,000 won and Samsung Heavy Industries rose 1.73 percent to 38,150 won. (Yonhap News)