The South Korean stock market ended lower Thursday over the gloomy outlook for inflation and concerns over aggressive monetary tightening. The local currency fell against the US dollar.

The Korea Composite Stock Price Index (KOSPI) lost 4.77 points, or 0.18 percent, to close at 2,612.45.

Trading volume was light at 583.60 million shares worth 8.48 trillion won ($6.69 billion), with decliners outpacing gainers 422 to 395.

Institutional investors sold a net 155.8 billion won, while retail and foreign investors bought a net 95.6 billion won and 36.7 billion won worth of shares, respectively.

The index opened higher, tracking overnight gains on Wall Street, as the US Federal Reserve's minutes of the early May meeting indicated some flexibility in its rate hike plans.

But the market turned lower, after the Bank of Korea (BOK) raised the key interest rate by a quarter percentage point to 1.75 percent and chief Rhee Chang-yong hinted at further rate hikes, citing high inflation.

"The BOK's hawkish stance has renewed concerns over aggressive monetary tightening and its possible impact on the growth momentum," Meritz Securities analyst Lee Jin-woo said.

The BOK forecast that the inflation will reach 4.5 percent this year, the fastest growth since 2008, while lowering its economic growth prediction to 2.7 percent from the previous 3 percent.

"It would take time for the market to make a meaningful upturn given lingering uncertainties, such as China's lockdown amid the COVID-19 pandemic and global supply issues," he added.

Big-cap tech shares ended lower to drag down the index.

Top-cap Samsung Electronics fell 0.75 percent to 65,900 won, and major chipmaker SK hynix sank 4.63 percent to 103,000 won.

But chemicals and steel shares rose, with major battery maker LG Energy Solution growing 0.94 percent to 430,500 won, and steel giant POSCO Holdings rising 1.2 percent to 294,000 won.

Bio shares also traded higher. Samsung Biologics advanced 1.08 percent to 840,000 won, and Celltrion increased 0.65 percent to 154,000 won.

Bank shares traded higher on interest rate hikes, with Kakao Bank climbing 1.25 percent to 40,650 won.

Shares of SK affiliates lost 1.96 percent combined, after the group vowed to invest 247 trillion won over the next five years to shore up its chip and other key businesses.

LG saw shares of its affiliates rising 0.22 percent after the announcement of its investment plan worth 106 trillion won by 2026, though home appliance giant LG Electronics lost 0.49 percent to 102,000 won.

The local currency ended at 1,267.0 won against the US dollar, down 2.4 won from the previous session's close. (Yonhap)