Seoul shares steady, bargain hunters emerge, pharma M&A plays star
* Kia Motors rebounds from 14-month low
* Hyundai Motor, Mobis also gaining back losses
* Pharmaceuticals hit ceiling on M&A expectations
SEOUL, Oct 30 (Reuters) - Seoul shares steadied on Tuesday morning with a recovery in large caps led by autos as bargain hunters emerged after the benchmark index slipped below 1,900 points, while some drug firms soared on speculation they could be takeover targets.
The Korea Composite Stock Price Index (KOSPI) ticked 0.67 percent higher at 1,903.94 points as of 0228 GMT, while the regional index also rose by a modest 0.3 percent.
"When the KOSPI falls below the 1,900-mark, you see bargain-buying by foreigners and local institutions," said Kim Soo-young, an analyst at KB Securities.
Shares in Kia Motors rose 2.5 percent from Monday's 14-month low. Shares in the country's biggest car maker Hyundai Motor and its parts supplier Hyundai Mobis were up 3 percent and 2.4 percent respectively.
Pharmaceutical companies were among the day's top gainers, as investors spied potential takeover targets in the rapidly consolidating industry.
Keunwha Pharmaceutical and Hondok Pharmaceutical both rose close to the daily ceiling of 15 percent.
Foreign investors and local institutions were net buyers, while retail investors were offloading shares.
Advancing shares outnumbered decliners 494 to 260.
The KOSPI 200 benchmark of core stocks was up 0.62 percent, while the junior KOSDAQ edged 1.3 percent higher.
In the currency market, South Korean authorities plan to inspect banks dealing operations in the country from next week, a senior finance ministry official said on Tuesday, a move seen as aimed at curbing the won's strength.
The won is up 5 percent against the dollar, 5 percent against the yuan and 10 percent against the yen, so far this year.
Analysts and traders said the move underscored the intention of policymakers to cap the won's rapid appreciation for fear it would hurt the competitiveness of exporters.
Officials at the ministry and the Bank of Korea denied that argument. A Finance Ministry official told Reuters the authorities were concerned about a rise in currency derivative positions, and changes in market conditions in the aftermath of the U.S. Federal Reserve's quantitative easing measures. (Reporting By Somang Yang; Editing by Simon Cameron-Moore)
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