South Korean stocks lost ground Tuesday amid rising geopolitical risks, which were caused by the Democratic People's Republic of Korea (DPRK)'s test-launch of a ballistic missile.

The benchmark Korea Composite Stock Price Index (KOSPI) declined 13.96 points, or 0.58 percent, to settle at 2,380.52. Trading volume stood at 380 million shares worth 4.75 trillion won (4.1 billion U.S. dollars).

South Korea's Joint Chiefs of Staff (JCS) said in a statement that the DPRK fired off a ballistic missile into its eastern waters from an area near Banghyeon, North Pyongan province in the DPRK's northwest region at around 9:40 a.m. local time (0040 GMT).

The DPRK declared later in the day that it has successfully launched an intercontinental ballistic missile (ICBM), calling it a milestone in its missile development program.

The missile flew 933 km and was lofted as high as 2,802 km to travel for 39 minutes and strike the target in its eastern waters, according to the DPRK's media report.

Foreigners were net sellers amid the escalating tensions on the Korean Peninsula. Foreign investors dumped a net 193 billion won worth of local shares, while individual and institutional investors bought shares worth 48 billion won and 104 billion won respectively.

Adding to the geopolitical concerns, investors got cautious ahead of the preliminary announcement of the second-quarter earnings results by Samsung Electronics, the KOSPI's bellwether which accounts for about 20 percent of the total market capitalization.

Samsung Electronics shares declined 0.5 percent, and memory chip SK Hynix lost 0.8 percent. The biggest wireless carrier SK Telecom tumbled 3.8 percent, and the No.1 auto parts maker Hyundai Mobis shed 3.1 percent.

Top automaker Hyundai Motor slipped 3.1 percent, but the state-run power supplier Korea Electric Power Corp. rose 1.5 percent. The biggest life insurer Samsung Life Insurance added 0.9 percent, and bank shares also gained ground.

South Korea's currency finished at 1,150.6 won against the greenback, down 3.7 won from the previous close.

Bond prices ended lower. Yields on the liquid three-year treasury notes rose 2.4 basis points to 1.740 percent, and the return on the benchmark 10-year government bonds gained 3.7 basis points to 2.272 percent.