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Seoul shares fall for 3rd day as tensions with N.Korea rise
April 3, 2013 / 6:41 AM / 5 years ago

Seoul shares fall for 3rd day as tensions with N.Korea rise

* KOSPI inches down 0.2 pct, hit by foreign selling

* N.Korea suspends entry to joint industrial complex

* Investors wary ahead of key events including Samsung guidance

* STX units extend falls on debt concerns

By Hyunjoo Jin

SEOUL, April 3 (Reuters) - South Korean shares fell for a third consecutive session on Wednesday after North Korea blocked access to a joint factory zone, escalating tensions on the peninsula.

The Korea Composite Stock Price Index (KOSPI) finished down 0.15 percent at 1,983.22 points, after falling as much as 0.7 percent due to foreign selling.

North Korea on Wednesday blocked entry to the Kaesong Industrial Park zone but will allow hundreds of South Koreans to return home, officials said, allaying fears they could have been held hostage.

“In the past, North Korean issues temporarily affected shares. What’s different this time is tensions may be prolonged as the North’s young leader is taking risks so soon after he has taken power,” said Kim Sung-soo, a fund manager at LS Asset Management.

Investors are also wary ahead of key events later this week such as policy meetings of the Bank of Japan and the European Central Bank, along with Samsung Electronics’ announcement of its earnings estimates and the U.S. government’s release of its payrolls report.

But overall, the KOSPI has risen more than 1 percent since North Korea’s February 12 nuclear test, whereas its Asian peers inched down during the period.

Kim said recent moves in the Korean won and the Japanese yen have alleviated concerns about the price competitiveness of South Korean exporters, aiding the KOSPI.

STX Offshore & Shipbuilding slumped by the daily limit of 15 percent following a similar plunge the previous session, after the shipbuilder announced on Tuesday that it had applied for a debt-restructuring deal with creditors.

Its parent firm STX Corp dived 11 percent, and other units of the conglomerate lost ground.

Other shipbuilders also extended falls, with Daewoo Shipbuilding & Marine Engineering losing 3 percent and Samsung Heavy Industries falling 2.9 percent.

Defensive stocks gained ground, with SK Telecom rising 2.5 percent and LG Uplus up 2.7 percent.

LG Innotek surged 8.8 percent, after analysts raised earnings expectations for the mobile parts supplier for Apple Inc and LG Electronics

“LG Electronics’ mobile phone business is reviving, and LG Innotek’s share for Apple is growing,” SR Kwon, an analyst at Dongbu Securities, said.

Move on day -0.15 percent

12-month high 2,049.28 3 April 2012

12-month low 1,769.31 25 July 2012

Change on yr -0.69 percent

All-time high 2,231.47 27 April 2011

All-time low 93.10 6 January 1981 (Editing by Sanjeev Miglani)

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