Shares end lower Tuesday as investors remain watchful of escalating U.S.-China tension

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,439.62 points on Tuesday, down 12.63 points, or 0.52 percent, from the previous trading day. [YONHAP]

Shares ended lower Tuesday, snapping a six-day winning streak, as investors remain watchful of escalating U.S.-China tension over Taiwan amid global recession worries. The won fell against the dollar.

The benchmark Kospi fell 12.63 points, or 0.52 percent, to close at 2,439.62 points.

Trading volume was moderate at 539.85 million shares worth 7.2 trillion won ($5.5 billion), with losers outnumbering gainers 615 to 240.

To get a cue, investors are keeping an eye on U.S. House Speaker Nancy Pelosi's planned visit to Taiwan late Tuesday and any new comments from the Federal Reserve officials about the need for higher rates to combat inflation, analysts said.

China has warned of "grave consequences" if Pelosi makes the trip to what it regards as part of its territory.

The Fed is expected to become less aggressive in raising rates because of recession risk after the U.S. economy shrank for a second consecutive quarter in the second quarter. But any shift in such expectations could stoke market volatility, they said.

Institutions sold a net 595.6 billion won worth of stocks, while foreigners purchased a net 294.2 billion won and retail investors a net 292.2 billion won worth of stocks.

In Seoul, Samsung Electronics rose 0.7 percent to 61,700 won. Hyundai Motor climbed 0.3 percent to 196,500 won, and its affiliate Kia gained 1.0 percent to 81,200 won. Aircraft manufacturer Korea Aerospace Industries was up 0.2 percent to 58,200 won.

Among decliners, chipmaker SK hynix fell 0.6 percent to 96,500 won, national flag carrier Korean Air Lines declined 0.4 percent to 25,000 won. Battery maker LG Energy Solution shed 0.6 percent to 417,000 won.

The local currency closed at 1,304.70 won against the dollar, up 0.70 won from the previous session's close.

The Kosdaq dropped 3.27 points, or 0.40 percent, to close at 804.34 points.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds lost 5.9 basis points to 3.022 percent, and the yield on the 10-year government bond fell 7.9 basis points to 2.57 percent.

BY CHO JUNG-WOO, YONHAP [cho.jungwoo1@joongang.co.kr]