South Korean stocks fell on Tuesday, derailed by sell-offs by foreign investors over concerns of a strong US dollar. The Korean won rose against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) declined 6.87 points, or 0.35 percent, to close at 1,967.53. Trade volume was moderate at 371 million shares worth 5.01 trillion won ($4.28 billion), with losers outnumbering gainers 446 to 369.

With the US dollar expected to gain strength under Donald Trump's presidency, foreign investors sold a net 209 billion won worth of local stocks.

Also, cautious investors stayed on the sidelines as Federal Reserve Chair Janet Yellen is scheduled to testify on the economic outlook later this week amid market expectations of an interest-rate hike next month.

"The equity market is bracing for volatility for the time being because of the US interest-rate issue," said Lee Kyung-min, a researcher at Daishin Securities.

Samsung Electronics fell 0.9 percent to end at 1,539,000 won, and AmorePacific, the No. 1 cosmetics maker, edged down 0.84 percent to 353,000 won.

SK hynix, a global chipmaker, remained flat at 39,700 won.

Automakers also traded in negative terrain, with industry leader Hyundai Motor down 1.14 percent to 130,500 won, and its smaller affiliate Kia Motors dipping 1.73 percent to 36,950 won.

The local currency closed at 1,170.60 won against the US dollar, up 1.3 won from the previous session's close. (Yonhap)