Seoul shares recover after strong China factory survey

Sun Sep 22, 2013 11:03pm EDT

* Shipbuilders lift the market on strong China data

* Samsung Elec and Hyundai Motor fall on grim 3Q earnings

* Foreigners on track for a 19th consecutive net-buying

SEOUL, Sept 23 (Reuters) - Seoul shares recovered from initial losses after a survey showed factory growth in China, South Korea's biggest export market, at a six-month high in September.

Re-opening after the three-day Chuseok holiday, South Korea had to catch up with other emerging markets following the U.S. Federal Reserve's decision last week to keep its massive stimulus programme unchanged until it sees stronger evidence of economic growth. The prolonged uncertainty over when the Fed might act appeared to dampen sentiment, before the flash HSBC Purchasing Managers Index report on China's factory sector sparked a rally.

"The Fed's decision gave mixed signals, and left investors to adopt a wait-and-see stance," said Daishin Securities analyst Park Jung-seop, before adding, "the stronger-than-expected China PMI data provided some confidence to investors."

By 0239 GMT, the Korea Composite Stock Price Index (KOSPI) was up 0.4 percent at 2,013.27 after trading as low as 1,994.77.

Shipbuilders buttressed the main index, buoyed by firm data from their key export market. Samsung Heavy Industries Co Ltd and Hyundai Heavy Industries Co Ltd rose 2.7 percent and 2.5 percent, respectively. Daewoo Shipbuilding & Marine Engineering Co Ltd also rose 1.9 percent.

Tech giant Samsung Electronics Co Ltd fell 1.3 percent after foreign investment banks lowered forecasts for the company's quarterly earnings due to concerns over a sharp decline in television prices and sales.

Automaker Hyundai Motor Co was down 1 percent, though profit-taking by investors who had enjoyed the stock's steady gains over recent months at one point saw the share price drop as much as 4.5 percent. Sentiment has been hurt by data showing Europe's car market shrank in August.

Kia Motors Corp, Hyundai's affiliate, also fell 0.7 percent.

Samsung SDI Co Ltd rose 4.4 percent as prospects for secondary batteries were seen higher after electric automaker Tesla Motors Inc reached its highest close price at $183 on Friday.

Cheil Industries Inc jumped 4.6 percent after announcing its strategic shift to an electronics material company by selling its fashion business to an unlisted affiliate Samsung Everland.

Hyundai Merchant Marine Co Ltd and Hyundai Elevator Co Ltd, listed affiliates of Hyundai Group, fell 3.4 percent and 2.8 percent after North Korea unilaterally postponed a reunion of war-torn families on Saturday. Hyundai Group used to operate tours of Mount Kumkang in North Korea, but suspended them in 2008. The postponement of the family reunions augured poorly for chances of an early resumption of those tours.

Foreign investors were poised to extend their net buying streak to a 19th consecutive session, purchasing 114.6 billion won worth of local shares in the morning.

Gainers outnumbered decliners 484 to 307.

The KOSPI 200 benchmark of core stocks edged 0.3 percent higher, while the junior KOSDAQ gained 0.4 percent.

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