South Korean firms' business sentiment worsened in January after improving for two straight months.

According to the Bank of Korea(BOK) on Tuesday, the nation's business survey index(BSI) for January came to 78, down three points from December. 

The monthly index dropped for the first time in three months after growing in November and December.  

The BSI measures corporate confidence. A figure of more than 100 means the majority of firms have a positive outlook of the economy.

The BSI for manufacturers reached 77, down four points from a month ago. It is the lowest recorded figure since it marked 76 in February last year.

The index for large companies dropped from 87 to 85, while the BSI for small manufacturers plunged by eight points to a 13-month low of 63.