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Seoul shares down; Hyundai Mobis falls, techs rise
Reuters - Monday, August 31
* KOSPI declines 0.8 percent on foreign selling
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* Hyundai Mobis tumbles after Hyundai Motor share purchase
* Memory chip issues gain on Intel's upbeat outlook comments
By Jungyoun Park
SEOUL, Aug 31 - Seoul shares slipped on Monday with Hyundai Mobis <012330.KS> tumbling after Hyundai Motor's share purchase, but techs such as Hynix <000660.KS> rose helped by positive comments from Intel on its outlook.
As of 0128 GMT, the Korea Composite Stock Price Index <.KS11> was down 0.76 percent at 1,595.76 points.
"Foreign selling following weak U.S. data is weighing on sentiment, momentum is fragile ahead of key U.S. manufacturing and job data this week," said Bae Sung-young, a market analyst at Hyundai Securities.
Foreign investors were sellers of 48.4 billion won worth of stocks, snapping a six consecutive session buying streak.
Shares in Hyundai Mobis tumbled after the auto parts making affiliate of Hyundai Motor <005380.KS> said late on Friday it had bought Hyundai Motor shares worth 1.34 trillion won ($1.08 billion) from Hyundai Steel <004020.KS>.
"This transaction is slightly negative for Mobis....Mobis spent all of its cash to buy Hyundai Motor shares which will lower return on earnings for Mobis...the transaction was made when Hyundai Motor was trading at close to the historic high," Macquarie said in its note on Monday.
Macquarie also added that the family of Chung Eui-sun, the vice chairman of Hyundai Motor, and his father, Hyundai Automotive Group Chairman Chung Mong-koo, will likely see an "incentive...to reduce the market cap of Mobis to further raise its stake ."
Shares in Hyundai Mobis tumbled 8.84 percent and Hyundai Motor was down 0.96 percent, while Hyundai Steel rose 4.87 percent.
Meanwhile, memory chip makers rose, led by Hynix Semiconductor, after Intel Corp <INTC.O> raised its outlook for third-quarter revenue on stronger-than-expected demand for its microprocessors and chipsets. [ID:nN28172958]
Samsung Electronics <005930.KS> was further helped by positive notes from Nomura after the Japanese investment bank raised its target price on the world's No.1 memory chip maker by 3.3 percent to 950,000 won from a previous 920,000 won and also boosted its third quarter operating profit estimates by 9 percent.
Shares in Hynix, the world's No.2 memory chip maker, rose 2.34 percent and Samsung Electronics, advanced 0.52 percent.
Falls in banking issues, pressured by the weaker won <KRW=> also weighed on the broader market, with KB Financial Group <105560.KS> falling 2.63 percent and as Shinhan Financial Group <055550.KS> lost 2.75 percent.
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