September 8, 2017 / 3:31 AM / 9 months ago

S.Korea stocks fall as fears over Chinese ventures hurt automakers

    * KOSPI down after gaining over 1 pct on Thursday
    * Hyundai Motor falls 3 pct, Kia Motors at 7-yr low; worries
over THAAD grow
    * Current situation could take severe toll on Hyundai Motor
    * Won edges up as dollar weakens after ECB hints at tapering

    SEOUL, Sept 8 (Reuters) - South Korean shares fell on
Friday, as automakers led by market heavyweight Hyundai Motor
            dropped on worries its Chinese joint venture partner
may pull out following the deployment of an anti-missile system
that has angered Beijing.
    South Korea's defence ministry confirmed on Wednesday that 
launchers of the U.S. Terminal High Altitude Area Defence
(THAAD) system would be installed to counter threats from the
North, with China lodging a stern protest again on Thursday. 
    China believes the system's radar could be used to look
deeply into its territory and will upset the regional security
    The Korea Composite Stock Price Index (KOSPI)         edged
down 0.1 percent to 2,343.04 as of 0237 GMT, with shares of
Hyundai Motor dropping as much as 2.9 percent. 
    Affiliate Kia Motors             lost 2.9 percent, while 
auto parts maker Hyundai Mobis             plunged nearly 7
    Hyundai Motor's China plant with joint venture partner BAIC
Motor Corp Ltd           resumed production late on Thursday,
following its suspension earlier in the week after a supplier
refused to provide parts due to delays in payment - its second
such incident in as many weeks.                          
    "There were some media reporting that BAIC may terminate its
partnership with Hyundai Motor as South Korea now has completed
installing remaining four THAAD systems," said Lee Sang-Hyun, a
stock analyst at IBK Securities.
    "Since the company's sales in China have been doing quite
well, investors seem to believe that the current situation will
do take a toll on the company severely."
    Tech shares however rose on expectations of robust earnings
for the July-September period.
    Shares of Samsung Electronics             and SK Hynix
            rose nearly 2 percent and 1.4 percent, respectively.
The sub-index for electric and electronics stocks         gained
1.3 percent. 
    Offshore investors trimmed a net 36.1 billion won ($32
million) worth of KOSPI shares near mid-session, weighing on the
    Decliners outnumbered advancers 586 to 210.
    The South Korean won        edged up, reflecting a weaker
dollar after European Central Bank chief Mario Draghi suggested
that the bank may begin tapering its massive stimulus programme
this autumn.                         
    The won            was up 0.1 percent at 1,128.3 against the
dollar, from Thursday's close of 1,129.4.
    September futures on three-year treasury bonds        
gained 0.07 point to 109.32. 
                       0237 GMT    Prev close
 Dollar/won             1,128.3       1,129.4
 Yen/won             10.4202/49       10.3890
 *KTB futures            109.32        109.25
 KOSPI                 2,343.04      2,346.19
 * Front-month futures on three-year treasury bonds

 (Reporting by Dahee Kim; Editing by Biju Dwarakanath)
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