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Seoul shares fall 0.2 pct autos, shipbuilders
Reuters - 1 hour 17 minutes ago
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* KOSPI takes breather after four sessions of gains
* Automakers underperform after Korea-U.S. FTA deal
* LG Electronics rallies on hopes for 2011 earnings
SEOUL, Dec 6 - Seoul shares ended lower on Monday weighed by falls in automakers and shipbuilders such as Hyundai Motor Co <005380.KS> and Hyundai Heavy <009540.KS>, but gains for LG Electronics Inc <066570.KS> gave market support.
The Korea Composite Stock Price Index <.KS11> ended down 0.18 percent at 1,953.64 points.
The market took a breather following four straight gaining sessions. Buying appetite eased after weaker-than-expected U.S. employment data, according to Kim Seung-han, a market analyst at HI Investment & Securities.
LG Electronics extended gains, rising 1.82 percent to 112,000 won after hitting a seven-month high of 114,500 won, amid strengthening hopes for earnings in the first half of 2011, according to analysts.
"Investors are hoping that earnings may turn positive by the first quarter of next year. If LG's handset business manages to record a profit by the second quarter, a stronger share price upgrade will take place," said Baek Jong-suk, an analyst at Hyundai Securities.
Baek said he recommended buying shares below 130,000 won, but said he may lift the target price if stronger signs of a turnaround appear.
Automakers fell after South Korea struck a trade deal with the United States on Friday that allows the U.S. to keep a 2.5 percent tariff on Korean-built cars for five more years. [ID:nN03287146]
The revised draft of the Korea-U.S. FTA made it easier to import U.S. cars, but this was not likely to significantly affect domestic car makers, said Kevin Lee, a market analyst at Shinhan Investment Corporation.
"Competition will be contained between foreign automakers in South Korea, especially Japanese car makers," Lee said, referring to differences between those consumers looking for more expensive foreign cars and those who prefer local brands.
Shares in Hyundai Motor <005380.KS> fell 1.6 percent and Kia Motors <000270.KS> dipped 1 percent.
Companies that involved in U.S. beef trading, an issue that was not resolved in the FTA, gave up earlier gains to edge lower.
The United States and South Korea had agreed to work on existing concerns about remaining restrictions on imports of U.S. beef, but South Korea did not commit to any immediate action, according to sources familiar with the talks. [ID:nN03287146]
Shares in Daekuk <042340.KQ> lost 3.8 percent and Hanil Feed <005860.KQ> declined 1 percent.
Substantial falls in shipbuilders also weighed, as shares in Hyundai Heavy Industries <009540.KS> tumbled 4.5 percent. Shares in Daewoo Shipbuilding & Marine Engineering <042660.KS> fell 2.2 percent.
Trading volume was 452.8 million shares worth 5.4 trillion won, compared with average daily trading volume and turnover of 346.6 million shares worth 6.7 trillion won in November.
The KOSPI 200 Dec futures <KSc1> index fell 0.4 points to 257.70. The KOSPI 200 spot index <.KS200> shed 0.33 points to 257.32.
The junior Kosdaq market <.KQ11> rose 0.08 percent to 502.54.
Move on day -0.18 percent
12-month high 1,976.46 11 NOV 2010
12-month low 1,532.68 25 MAY 2010
Change on yr +16.1 percent
All-time high 2,085.45 1 NOV 2007
All-time low 93.10 6 JAN 1981 (jungyoun.park@thomsonreuters.com; +82 2 3704 5643; Reuters Messaging: jungyoun.park.reuters.com@reuters.net))
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