South Korean stocks closed 0.2 percent lower Friday as improved economic data sparked concerns over a reduction in the U.S. quantitative easing, analysts said.

The local currency gained against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 3.8 points to finish at 1,920.11. Trading volume was moderate at 334.8 million shares worth 3.55 trillion won ($3.19 billion) with losers outpacing gainers 429 to 354.

Analysts said Seoul shares lost ground due on the market outlook that the U.S. Federal Reserve may cut back its quantitative easing moves due to the signs of an economic recovery in the country.

The U.S. unemployment claim data reached a 70-month low last week, and its consumer prices also advanced for the third consecutive month.

"The local stock market was dented by the escalating concerns on a possible cut in the U.S. quantitative easing and the rising political uncertainties in Egypt," said Park Sung-hoon, an analyst at Woori Investment & Securities Co.

Foreigners bought more shares than they sold at a net 213.2 billion won. In contrast, individuals and institutions offloaded a net 194.6 billion won and 4.6 billion won, respectively.

Tech shares closed lower, with No. 1 player Samsung Electronics falling 0.38 percent to 1,295,000 won and leading chipmaker SK hynix moving down 1.54 percent to 28,700 won. LG Electronics shed 1.85 percent to 74,400 won.

Brokerage houses also closed bearish, with Samsung Securities losing 0.11 percent to 45,500 won and KDB Daewoo Securities falling 0.51 percent to 9,700 won. Woori Investment & Securities shed 2.55 percent to 11,450 won.

In contrast, carmakers closed higher, with leading Hyundai Motor advancing 1.5 percent to 236,000 won and its smaller affiliate Kia Motors rising 0.64 percent to 62,900 won. Top auto parts maker Hyundai Mobis gained 0.75 percent to 268,000 won.

Logistics firms also gathered ground, with Hyundai Glovis moving up 0.26 percent to 194,000 won and Hyundai Merchant Marine adding 6.94 percent to 24,650 won. Hanjin Shipping gained 4.91 percent to 8,760 won.

The local currency ended at 1,113.60 won against the greenback, up 5.10 won from Wednesday's close amid investors' divided outlook over the future U.S. quantitative easing moves, dealers said.

The local financial markets were closed Thursday to celebrate Liberation Day, which commemorates Korea's independence from Japan's colonial rule.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year Treasuries moved down 0.01 percentage point to 2.96 percent and the return on the benchmark five-year government bonds gained 0.01 percentage point to 3.29 percent. (Yonhap News)