South Korean shares closed lower Friday as institutions sought to cash in early gains while heightened geopolitical risks following a decision to deploy a U.S. tactical missile defense system in South Korea spooked investors.

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


The benchmark Korea Composite Stock Price Index lost 10.98 points, or 0.56 percent, to 1,963.10. Trading volume came to 345.9 million shares, worth 4.07 trillion won ($3.5 billion), with losers outnumbering gainers 574 to 247.

The index got off to an upbeat note, but pared earlier gains after institutions turned to selling on profit-taking.

Institutions offloaded a net 296.5 billion won worth of local shares, while foreign investors purchased a net 30.06 billion won.

Individual investors scooped up a net 222.17 billion won.

"The market appears to have been most affected by the fresh geopolitical risk created by the government's agreement with the U.S. to deploy the Terminal High Altitude Area Defense system in South Korea, even though there were many other factors affecting the market, such as a continued depreciation of the Chinese yuan," said Kim Sung-hwan, an analyst at Bookook Securities analysts.

Most large caps ended in negative terrain, while top cap Samsung Electronics added 0.69 percent to finish at 1,460,000 won, one day after it said its second-quarter operating profit was estimated at 8.1 trillion won, far exceeding market consensus of 7.34 trillion won.

Other tech issues also closed in positive terrain, with global chipmaker SK hynix advancing 1.31 percent to 31,050 won and Samsung SDS, an IT affiliate of Samsung Electronics, spiking 2.55 percent to 140,500 won.

Top automaker Hyundai Motor lost 0.38 percent to 130,500 won, while a leading cosmetics maker, LG Household & Health Care, plunged 4.49 percent to 1,128,000 won.

The local currency closed at 1,161.80 won against the U.S. dollar, down 7.20 won from the previous session's close. (Yonhap)