Roundup: S.Korean shares fall on concerns over Fed's rate hike

South Korean shares posted a sharp decline Monday on concerns that the U.S. Federal Reserve may raise its benchmark interest rate this week.

The benchmark Korea Composite Stock Price Index (KOSPI) declined 20.80 points, or 1.07 percent, to 1,927.82 at the close. Trading volume stood at 425.67 million shares worth 4.02 trillion won (3.39 billion U.S. dollars).

The KOSPI marked the lowest close in more than three months on worries about the Fed's rate hike for the first time since the 2008 global financial crisis during the regular monetary policy meeting scheduled for Tuesday and Wednesday.

Adding to the Fed's rate hike worries, low crude oil prices boosted volatility in the stock market.

Market watchers said that the Fed's rate hike would devalue currencies in emerging markets, such as South Korea. The depreciation in the South Korean won tends to cause foreign exchange losses to foreign investors into South Korean stocks.

Foreigners sold a net 294 billion won worth of local stocks, keeping their selling streak for the ninth consecutive session. Local financial institutions purchased shares worth 344 billion won, but retail investors reduced their stock holdings by 148 billion won.

Large-cap shares ended mixed. Market bellwether Samsung Electronics declined 1.8 percent, and Samsung C&T, a construction unit of Samsung Group, slumped 2 percent. The No.1 cosmetics maker AmorePacific lost 0.4 percent, and leading chemical firm LG Chem dipped 1.1 percent.

Memory chip giant SK Hynix retreated 2.9 percent, but top automaker Hyundai Motor gained 1.4 percent. The state-run power supplier Korea Electric Power Corp. advanced 1.8 percent, and the biggest auto parts maker Hyundai Mobis climbed 3.6 percent. Top life insurer Samsung Life Insurance added 1 percent, and the No.2 carmaker Kia Motors picked up 2.7 percent.

The South Korean currency finished at 1,184.8 won against the greenback, down 5.3 won from Friday's close.

Bond prices ended higher. Yields on the liquid three-year treasury notes fell 1.6 basis points to 1.732 percent, and the return on the benchmark 10-year government bonds dipped 2.2 basis points to 2.221 percent. Endit