South Korean stocks finished sharply lower Tuesday, as investors remained wary of rising geopolitical tension stemming from North Korea's missile launch, analysts said. The Korean won fell against the US dollar.

After a choppy session, the benchmark Korea Composite Stock Price Index shed 13.96 points, or 0.58 percent, to close at 2,380.52 as uncertainties surrounding North Korea caused investors to cash in recent gains.

Trade volume was moderate at 380 million shares worth 4.75 trillion won ($4.13 billion), with losers outnumbering gainers 582 to 216.

The local stock market opened flat despite overnight gains on Wall Street, as investors took to the sidelines ahead of Samsung's second-quarter earnings guidance release.

"Ahead of Samsung's earnings guidance report, investors are taking a wait-and-see stance," said Lee Kyong-min, an analyst at Daishin Securities.

In the afternoon session, the market sentiment was dampened after Pyongyang said it would make an 'important announcement' at 3 p.m. (Pyongyang time) after it launched a ballistic missile earlier in the day.

After the market closed, the North claimed it has successfully test-fired an intercontinental ballistic missile.

Analysts said the KOSPI has risen for the seventh consecutive month, which means that a profit-taking stance may take hold among investors.

Samsung Electronics, the top market cap here, fell 0.47 percent to end at 2,350,000 won, and SK hynix, a major chipmaker, dropped 0.75 percent to 65,800 won on profit-taking.

POSCO, the top steelmaker, declined 1.36 percent to end at 291,000 won, and SK Innovation, the top refiner in the country, fell 0.62 percent to end at 160,000 won.

Hyundai Motor, the No. 1 automaker, declined 3.06 percent to end at 158,500 won, and its smaller affiliate Kia Motors slid 1.81 percent to 38,000 won.

In contrast, utility and banking stocks remained bullish.

The state-run Korea Electric Power Corp. gained 1.47 percent to finish at 41,300 won.

Shinhan Financial Group, the most profitable banking group, advanced 0.71 percent to 49,900 won, with KB Financial remaining flat at 57,800 won.

LG Display, a major flat panel maker, jumped 5.34 percent to end at 38,500 won.

The local currency closed at 1,150.60 won against the U.S. dollar, down 3.7 won from the previous session's close. (Yonhap)