The benchmark KOSPI fell 0.17% to around 3,197 on Tuesday, retreating from a near four-year peak as investors raked in profits after a recent rally.
Market sentiment turned cautious despite Trade Minister Yeo Han-koo signaling that an in-principle agreement with the United States was within reach, following high-level talks focused on averting steep tariffs.
To sidestep the risk of a 25% tariff on its exports, South Korea is pushing to finalize a compromise trade agreements, while signaling a possible willingness to offer the US expanded access to its agricultural markets.
Further weighing on sentiment, Yeo acknowledged that the remaining 20 days before the August 1 deadline may not be sufficient to conclude a fully detailed treaty.
On the corporate front, notable losses were from SK Hynix (2.50%), Hyundai Motor (2.07%), Kia Corporation (1.94%), and KB Financial Group (1.52%).