"The Fed and G7 meetings this week are acting as major drags on the market, while the won doesn't appear to be budging ahead of these key events," said Kim Dong-uk, an equity strategist at Daishin Securities.
"Still, the market has held on to the bulk of gains in January, and investors have enough confidence in the market not to push it down much further," he added.
A recent surge in the South Korean won to new seven-year highs versus the dollar has sparked worries about the price competitiveness of local exporters.
Hyundai Motor Co, South Korea's top carmaker, ended down 1.07 percent at 55,700 won, as investors also fretted over the firm's fourth-quarter results due on Friday. LG Electronics Inc, the world's top maker of air conditioners, fell 0.72 percent to close at 69,000 won.
Investment sentiment was also chilly ahead of the US Fed's interest rate decision.