Seoul shares lacklustre on foreign selling, U.S. fiscal cliff

Wed Nov 14, 2012 2:15am GMT

* LG Display falls after news of Sharp talks with Intel, Qualcomm

* LG Elec gains on smartphone outlook, KEB extends falls

SEOUL Nov 14 (Reuters) - Seoul shares traded slightly lower Wednesday morning as concerns about continued foreign selling weighed on investor sentiment already hurt by uncertainty over the looming U.S. fiscal cliff and the Greek debt bailout.

The Korea Composite Stock Price Index (KOSPI) ticked 0.03 percent lower at 1,889.13 points as of 0156 GMT, paring gains earlier in the day.

"Investors are sitting on the fence as a political debate started over the U.S. fiscal cliff. There are concerns that foreigners may continue selling to reap gains from the recent appreciation of the South Korean won," said Kim Young-jun, an analyst at SK Securities.

Global stocks have lost ground since the re-election of U.S. President Barack Obama last week, as investors have shifted focus to the fiscal cliff, a convergence of urgent tax and spending issues that could plunge the economy into recession.

On Tuesday, the U.S. Congress gathered in Washington for the first time since the elections, with a fundamental tax dispute preventing a broader compromise on deficit reduction.

While the technology sector gained ground, LG Display bucked the trend, down 0.29 percent after news that its ailing rival Sharp Corp is in talks to secure $378 million investment from U.S.-based Intel Corp and Qualcomm Inc.

LG Electronics extended gains, up 2.93 percent after Shinhan Investment expected the company to boost smartphone sales and outpace HTC Corp as the third biggest smartphone maker in the fourth quarter.

Chemicals firms were among the worst performers, with SK Chemicals down 3.22 percent and LG Chem falling 2.32 percent.

Korea Exchange Bank extended declines, falling to its lowest level in more than 13 months after Daishin Securities cut the target price of the lender, predicting lower-than-expected net profit for the fourth quarter. (Reporting by Hyunjoo Jin; Editing by Eric Meijer)

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