South Korean stocks ended 1.36 percent lower Friday as foreigners continued to offload local equities on global financial uncertainties and plunging oil prices, analysts said. The local currency gained ground against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) failed to recover to the 1,900 mark it surrendered in the morning session and closed at 1,888.13 after plummeting 26.01 points. Trading volume was low at 289 million shares worth 3.9 trillion won (US$3.62 billion), with decliners beating gainers 569 to 244.

Analysts said the sharp decline came as foreign investors sold off their shares amid financial uncertainties abroad coupled with oil prices stuck in a rut.

"Even while ruling out the Swiss central bank's currency cap issue, the imbalance in supply and demand may persist because of mid- to long-term issues, such as global oil prices," said Lim Noh-jung, an analyst at I'M Investment & Securities Co.

On Thursday, the Swiss National Bank announced it will scrap its franc-euro currency cap, jolting the global financial market.

"Foreign capital will flow back into the local market only after risk factors that increase volatility in the global market become stabilized," Lim said.

Foreign investors have been in selling mode for the past five consecutive sessions and concluded Friday's session after offloading a net 308.85 billion won. Retail investors bought more shares than they sold at 286.7 billion won, while institutions sold off a net 118.26 billion won.

The 10 firms with the largest market caps on the local bourse mostly finished in negative territory. Market behemoth Samsung Electronics moved down 1.35 percent to 1,316,000 won, and the country's top carmaker, Hyundai Motor, lost 2.01 percent to 171,000 won.

No. 2 chipmaker SK hynix tumbled 4.14 percent to close at 47,450 won, and Samsung Life, the seventh-largest on the local bourse, also fell 3.51 percent to 110,000 won. The country's top portal operator, Naver, on the other hand, managed to remain unchanged at 777,000 won.

Builders moved in different directions as Hyundai Engineering & Construction dropped 4.46 percent to 36,400 won while Kumho Industrial pushed up 1.62 percent to 21,950 won.

GS Engineering & Construction gained 0.5 percent to end at 20,100 won on the back of the $2.62 billion contract it clinched to set up a gas plant in Venezuela. 

South Korea's largest air carrier, Korean Air Lines, surrendered 1.22 percent to 44,600 won, but Asiana Airlines was able to move up 1.71 percent to close at 7,720 won.

The local currency advanced sharply against the greenback, ending at 1,077.30 won per dollar, up 6.0 won from Thursday's close. The rate hit an intra-day high of 1,072.00 won at one point. (Yonhap)