The KOSPI rallied last week, closing above the 2,500-level mark for the first time Oct. 30 and ending at an all-time high Friday.

"The fact that US President Donald Trump could mention the renegotiation of the trade deal during their summit weighed on the local stock market," said Seo Sang-young, a researcher at Kiwoom Securities Co.

During Tuesday's summit, which took place as part of Trump's first visit to Asia, trade was expected to be high on the agenda, along with North Korean issues. The two countries recently launched a formal discussion on modifying their bilateral trade deal.

Foreign investors bought a net 131 billion won, while individuals and institutional investors dumped a net 75 billion won and 89 billion won worth of local stocks, respectively.

Most large caps ended in negative terrain, with market kingpin Samsung Electronics declining 0.5 percent to end at 2,805,000 won.

SK hynix, a major chipmaker, shed 1.32 percent to 82,400 won.

Auto shares were also among the losers, with No. 1 carmaker Hyundai Motor plunging 2.21 percent to 155,000 won and its auto parts affiliate Hyundai Mobis sliding 2.39 percent to 266,000 won.

Naver, South Korea's top Internet portal operator, shed 0.12 percent to 860,000 won, and leading cosmetics company AmorePacific also surrendered 0.93 percent to 320,000 won.

Steel shares, meanwhile, managed to remain in positive terrain, with major steelmaker POSCO edging up 1.57 percent to 324,000 won.

The local currency closed at 1,111.90 won against the US dollar, up 3.1 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys moved down 1.9 basis points to 2.133 percent and the return on benchmark five-year government bonds fell 3 basis points to 2.357 percent. (Yonhap)