South Korean shares fell on Tuesday after rebounding in the previous session as investors reduced stock holdings ahead of announcement of key economic indicators in the United States and the regular central bank meeting in Europe.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 5. 58 points, or 0.29 percent, to close at 1,907.13. Trading volume stood at 868.71 million shares worth 4.51 trillion won (3.98 billion U.S. dollars).

After fluctuating in a narrow range, the KOSPI ended slightly lower as investors were reluctant to take aggressive positions ahead of major economic data announcement in the United States and the European Central Bank (ECB)'s monetary policy meeting later this week.

Market watchers said the KOSPI was expected to move in a box range until the ECB meeting ends on Thursday, saying that investors would sought to take positions only after finding the results on manufacturing activities and employment in the U.S.

Foreign and retail investors bought shares worth 18.4 billion won and 26.6 billion won each, but they failed to shore up the local stock market. Institutional investors sold a net 32.7 billion won worth of stocks, while program-linked transactions posted net selling worth 108.7 billion won.

Auto shares led the market decline. Top automaker Hyundai Motor retreated 2.3 percent to 236,000 won, and its affiliate Kia Motors lost 2.51 percent to 73,700 won. Domestic auto sales by Hyundai tumbled 29.9 percent in August from a year earlier, the first decline in more than three years. Local sales by Kia dropped 12.4 percent last month.

Among large-cap shares, losers outnumbered gainers. The nation' s biggest steelmaker POSCO fell 0.8 percent to 363,000 won, and top crude oil refiner SK Innovation dipped 0.3 percent to 167,500 won. The nation's largest auto parts maker Hyundai Mobis lost 3.0 percent to 304,000 won.

Market bellwether Samsung Electronics ended steady at 1,218,000 won, but memory chip giant SK Hynix rose 0.5 percent to 21,500 won. Leading chemical firm LG Chem edged up 0.2 percent to 305,500 won, and leading shipbuilder Hyundai Heavy Industries gained 1.1 percent to 236,000 won.

The local currency finished at 1,133.1 won against the greenback, down 2.1 won from Monday's close.

Bond prices ended lower. The yield on the liquid three-year treasury notes rose 0.02 percentage point to 2.77 percent, and the return on the benchmark five-year government bonds added 0.03 percentage point to 2.86 percent.