South Korean stocks tumbled 1.34 percent on Monday as top conglomerate Samsung's affiliates retreated after the regulator's call to resolve cross shareholding issues. The local currency rose against the greenback.

The benchmark Korea Composite Stock Price Index shed 26.59 points to end at 1,964.06. Trade volume was thin at 389.69 million shares worth 3.75 trillion won ($3.22 billion), with losers outnumbering winners 548 to 278.

Losses by Samsung affiliates dragged the index down after the Fair Trade Commission on Sunday ordered Samsung SDI to sell part of its stake in Samsung C&T as its merger with another Samsung affiliate, Cheil Industries, has strengthened cross-shareholding ties within the conglomerate.

Five million shares of Samsung C&T, worth 692.5 billion won by Monday's closing price, should be sold by March 1, though market watchers expect Samsung to seek the extension of the deadline factoring in the short time span.

Samsung C&T, the group's construction and trading unit, tumbled 4.81 percent to 138,500 won; Cheil Industries, its apparel and resort subsidiary, sank 3.78 percent to 20,350 won; and Samsung SDI went down 3.06 percent to 111,000 won. Top-cap Samsung Electronics also lost 1.48 percent to 1,266,000 won. 

"The Samsung issue drew investors' attention while no other major leads exist. But it will have a limited impact, as it would serve as a chance for traders to pick up bargains," IBK Securities researcher Kim Jung-hyun said.

"Heading into the year-end, traders are taking a wait-and-see stance after last week's bull run. They also appear to be leery of corporates' fourth-quarter earnings," he added. The market for this year will be closed on Dec. 31 and Jan. 1 for New Year's Day.

Foreigners extended their selling binge to an 18th consecutive session by offloading a net 32.55 billion won. Individuals also joined them by selling a net 182.67 billion won.

Institutions, however, capped the fall by purchasing a net 141.45 billion won of shares ahead of the ex-dividend date when all shares bought and sold no longer come with the right to receive the most recently declared dividend.

Stocks fell across the board, with tech and chemicals hit hard.

Industry leader LG Chem skidded 1.33 percent to 333,550 won, and S-Oil dropped 3.06 percent to 79,300 won. Chipmaker SK Hynix went down 2.52 percent to 30,900 won.

It's SKIN, a local cosmetics brand, lost 11.63 percent to 152,000 won on the first day of its KOSPI market debut.

Bucking the trend, however, Mirae Asset Securities spiked 9.67 percent to 21,550 won after the group chief Park Hyeon-joo stressed his commitment to continue to expand investment down the road while vowing to properly manage risks to be the market leader in the global arena.

The veteran investor and the group founder made the remarks during a press briefing earlier in the day after it was chosen as the preferred bidder for a 43-percent stake in Daewoo Securities, a deal that would create the country's biggest brokerage with a combined capital of around 8 trillion won.

The local currency ended at 1,165.45 won against the greenback, up 2.35 won from Thursday's close. The market closed on Friday for Christmas. (Yonhap)