South Korean stocks fall on growing global growth concerns

Tue Sep 25, 2012 3:31am EDT

* KOSPI sheds 0.6 percent
    * Investors cautious ahead of Spain, holiday
    * Growth concerns hurt steelmakers, construction firms
    * Pension fund buying offsets selloff by others

    By Christine Kim
    SEOUL, Sept 25 (Reuters) - South Korean shares fell
as investors joined many in Asia in feeling spooked into selling
some risky assets on widespread worries about world-wide growth.
    The Korea Composite Stock Price Index (KOSPI) closed down
0.6 percent at 1,991.41 points, falling below a key
psychological level of 2,000 points but remaining trapped within
a narrow range for an eighth day.
    Analysts said the liquidity of the Seoul main bourse as a
whole was diminished as investors squared positions ahead of a
major three-day national holiday that starts on Saturday.
    Discouraging business sentiment data from Germany, which
showed confidence in September falling for a fifth month also
weighed on the market, as well as a gloomy earnings forecast for
the world's biggest earth-moving equipment maker, Caterpillar
Inc.
    "Trading was choppy today as investors' concerns were stoked
over what might happen in Spain after the disappointing data,"
said Kang Hyun-ki, a researcher at IM Investment and Securities
in Seoul.
    The Spanish government will hand in a draft budget for next
year on Thursday and traders will be watching to see if it seeks
bailout funds.
    Kang added that there was still a chance the South Korean
stock market could rise to 2,100 points in the last quarter of
the year.
    Steelmakers and heavy industry firms suffered losses on
Tuesday as slowed global growth was translated into less
business for the sectors. Kumho Industrial tumbled
more than 8 percent, making it the sector's biggest loser.
    LG Electronics Inc skidded 5.4 percent after
Korean brokerages issued on gloomy third quarter earnings
forecasts, despite the fact that it will release a new
smartphone on Wednesday.
    Meanwhile, Samsung Group's advertising affiliate Cheil
Worldwide rose more than 4 percent after local media
reported it would be buying 75.4 billion won ($67.29 million)
worth of its own shares to stabilise its stock price.    
    Foreigners were net sellers of 86.4 billion won and pulled
down the KOSPI along with local investment trusts, but losses
were capped by net buying by pension funds.
    Decliners far outnumbered gainers 571 to 259.  
    The KOSPI 200 benchmark of core stocks closed down
0.6 percent, while the junior KOSDAQ fell 1.8 percent. 

          Move on day                -0.6 percent   
          12-month high   2,057.28   14 March 2012    
          12-month low    1,644.11   26 Sept 2011               
          Change on yr               +9.1 percent
          All-time high   2,231.47   27 April 2011   
          All-time low       93.10   6 January 1981 
($1 = 1120.5250 Korean won)

 (Additional reporting by Chang Seongwon; Editing by Richard
Borsuk)
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