Seoul shares retreat after strong gains, LG declines

Thu Dec 13, 2012 9:54pm EST

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* LG Display takes breather after 3 months of gains

* STX Pan Ocean jumps on stake sale hopes

* Handok Pharmaceuticals up on TEVA joint venture

By Somang Yang

SEOUL, Dec 14 (Reuters) - Seoul shares softened early on Friday as the index took a breather after Thursday's solid gains and Wall Street turned lower on renewed concerns over stagnant U.S. budget talks.

The Korea Composite Stock Price Index (KOSPI) ticked 0.6 percent lower to 1,991.25 points as of 0225 GMT.

"Investors are realising that the U.S. fiscal talks are difficult to resolve, but the index is only paring the big gains it made in the last few minutes of Thursday's trades on program buying," said Han Bum-ho, an analyst at Shinhan Securities.

The index made most of its gains in the last minute of trade on Thursday as the expiry of December's options and futures set off a flurry of computerised buying.

Shipbuilders underperformed, with the sub-index slumping 1.7 percent.

Flat-screen maker LG Display fell 3.3 percent, extending Wednesday's 4.9 percent loss. However, its shares had been on an upswing before that, gaining 32 percent in value between September and December.

"There is no change in fundamentals and the company's profits are set to improve. However, shares have risen a lot recently, with some investors thinking that it will benefit from Sharp's misfortunes," said Choi Do-yeon at LIG Investments & Securities, referring to Japan's troubled Sharp Corp.

STX Pan Ocean bucked the trend, jumping 7.9 percent after local media reported that its cash-strapped parent company STX Corp was in talks with various companies to sell its controlling stake.

Among small caps, Handok Pharmaceuticals rose 3.8 percent on news that it would form a joint venture with Israel's Teva Pharmaceutical Industries.

Foreign investors were net sellers after eleven sessions of buying, which weighed on the index.

Declining shares outnumbered winners 470 to 281.

The KOSPI 200 benchmark of core stocks was down 0.6 percent, while the junior KOSDAQ was edging up 0.2 percent. (Editing by Jacqueline Wong)

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