South Korean stocks fell 0.62 percent Tuesday, as investors refrained from making risky bets amid lingering aftershocks from the yuan devaluations, analysts said.

The local currency lost ground against the U.S. dollar.

The benchmark Korea Composite Stock Price Index dropped 12.26 points to close at 1,956.26. Trading volume was moderate at 467 million shares worth 5.54 trillion won ($4.67 billion) with decliners far outpacing advancers 628 to 206.

"Although the yuan fear has eased, we need more time until investor sentiment recovers, especially given that the devaluation last week derives from a slowing Chinese economy. We need to keep in check any additional measures from Beijing," said Lee Joon-hee, an analyst at NH Investment & Securities Co.

Investors also remained wary ahead of the release of the U.S. Federal Reserve's July minutes on Thursday (U.S. time), as they want something more concrete over the time table of an interest rate hike, Lee added.

Foreigners continued their selling binge for a ninth consecutive session, dumping a net 46.8 billion won. Individuals sold off a net 98.7 billion won, while institutions bought a net 81.6 billion won.

Food manufacturers with big exposure to China took a further dive on Tuesday. Confectionery maker Orion tumbled 10.71 percent to 917,000 won, with leading food and beverage producer CJ Cheiljedang dipping 2.92 percent to 399,500 won.

Chemical companies also finished lower. LG Chem suffered a 2.32 percent fall to 232,000 won and Lotte Chemical also surrendered 4.37 percent to 230,000 won.

In contrast, automakers closed higher, as a cheaper yuan gives them an edge in price competitiveness since a large portion of their production is based in China.

Industry leader Hyundai Motor gained 2.09 percent to 146,500 won and its auto parts-making affiliate Hyundai Mobis rose 2.7 percent to 209,500 won.

The local currency ended at 1,185.00 won against the greenback, down 1.9 won from Monday's close, amid a volatile foreign exchange market due to the yuan devaluations, dealers said.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys slipped 0.7 basis point to 1.716 percent and the return on the benchmark five-year government bonds lost 1.0 basis point to 1.923 percent. (Yonhap)