June 24, 2013 / 2:41 AM / 4 years ago

Seoul shares dip for fourth day, hit 11-month low

* KOSPI only 3 percent above pre-QE3 lows

* Techs, autos, defensive plays weigh on market

* Defence shares rally on N.Korea envoy comments

SEOUL, June 24 (Reuters) - Seoul shares fell for a fourth session in a row on Monday to an 11-month low as investors remained cautious about the impact of the U.S. Federal Reserve’s plans to wind down its easy money policy, as well as about slowing growth in China.

The Korea Composite Stock Price Index (KOSPI) was down 0.63 percent at 1,811.42 points as of 0150 GMT, after falling as far as 1,805.01, its lowest since July of last year.

Chang Hee-jong, a market analyst at Daewoo Securities, noted that the market was close to erasing all of the gains scored as it anticipated a third round of quantitative easing by the Federal Reserve last year.

“The market could fall to the lows seen before QE3,” Chang said.

The KOSPI is only 3 percent above the low of 1,758.99 points hit on July 25, 2012, before a bounce fuelled by expectations of economic stimulus measures by the Fed, which were implemented later in the year.

The focus is now on China, Chang said. “No one wants to make any moves before we have some idea of how markets and key economies like China fare as the U.S. unwinds its stimulus.”

Foreign investors were sellers of a net 129.5 billion won ($112.4 million) worth of stocks, offloading shares for a 12th consecutive session, the longest selling streak in three months.

The market’s key auto and technology heavyweights led the downward move, with Kia Motors declining 1.4 percent and LG Display shedding 1.3 percent.

Defence stocks rallied after North Korea’s top envoy said it would not unilaterally dismantle its nuclear arsenal. Military equipment parts maker Victek Co Ltd rose 2.3 percent and Speco advanced 4.9 percent.

Defensive plays in the telecommunications sector, which had sharply outperformed versus the broader market, were hit by profit-taking.

SK Telecom Co, which had gained 39 percent so far this year as of Friday’s close, was down 3.8 percent and LG Uplus Corp, which had jumped 63.5 percent this year, declined 3.1 percent.

Insurers outperformed as recent gains in treasury bond rates pointed to a rise in their capital gains as they have large treasury bond holdings. Samsung Fire & Marine Insurance Co Ltd advanced 4.5 percent.

The KOSPI 200 benchmark of core stocks fell 0.6 percent, while the junior KOSDAQ edged 0.4 percent lower. ($1 = 1152.2500 Korean won) (Reporting by Jungyoun Park; Editing by Edmund Klamann)

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