South Korean stocks closed 0.92 percent lower on Monday as investors sat on the sidelines due to economic risks from the eurozone and the United States, analysts said. The local currency fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) shed

18.32 points to 1968.18. Trading volume was low at 265.2 million shares worth 3.83 trillion won (US$3.44 billion), with decliners outnumbering gainers 565 to 258.

"The decline came as the financial crisis of Cyprus weighed down on investors sentiment as the risk is feared to spill over to the rest of the eurozone," said Kang Hyun-gie, a researcher at I'M Investment & Securities Co.

The International Monetary Fund and the eurozone countries agreed on Saturday to provide a bailout worth 10 billion euros

(US$13.1 billion) to Cyprus in a bid to prevent the country from going bankrupt.

"Investors were also unnerved by lower-than-expected U.S.

consumer sentiment in March, which came as a consequence of the country's automatic spending cuts," Kang added.

Foreigners offloaded a net 364.5 billion won worth of local shares. In contrast, institutions scooped up a net 157.6 billion won and retail investors purchased a net 204.7 billion won.

Market behemoth Samsung Electronics shed 2.36 percent to 1,445,000 won, falling for the third consecutive session, despite launching the Galaxy S4 model in the U.S. on Thursday.

LG Chem, South Korea's leading battery maker, declined 1.65 percent to 268,500 won, falling for the sixth consecutive trading session as foreign investors continued to offload its shares.

Logistics shares lost ground, with Hyundai Glovis decreasing

4.52 percent to 190,000 won and Hyundai Merchant Marine sliding

3.29 percent to 14,700 won.

Carmakers also closed bearish, with No. 1 player Hyundai Motor falling 0.45 percent to 219,000 won, and its smaller affiliate Kia Motors losing 0.37 percent to 54,000 won.

In contrast, defense shares closed higher on rising tension with North Korea, with Huneed Technologies increasing 1.2 percent to 3,810 won and Firstec adding 3.23 percent to 2,400 won.

Food makers also closed higher, with No. 1 industry player CJ Cheiljedang rising 0.43 percent to 351,500 won and Nongshim, South Korea's leading instant noodle maker, adding 4.21 percent to 297,000 won.

The local currency ended at 1114.60 won to the U.S. dollar, down 4.30 won from Friday's close, following a gloomy outlook over the eurozone, dealers said.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasuries moved down 0.02 percentage point to

2.59 percent and the return on the benchmark five-year government bonds also fell 0.03 percentage point to 2.68 percent. (Yonhap News)