S.Korean shares down on US woes; shipbuilders, Samsung SDI weigh
* KOSPI on track for a weekly loss, first since late Aug.
* Shipbuilders lose steam on profit-taking
* Samsung SDI fall on Tesla car fire
SEOUL, Oct 4 (Reuters) - South Korean shares surrendered early gains And turned lower on Friday as a U.S. budget standoff dragged on and a more complex fight loomed later this month to raise the U.S. borrowing limit.
The Korea Composite Stock Price Index (KOSPI) was down 0.4 percent at 1,991.60 by 0201 GMT after touching an intraday low of 1,985.63, the lowest intraday level since Sept.10.
The KOSPI looked set for a 1 percent loss on the week, its forst weekly loss since late August.
President Barack Obama met with Republican and Democrat leaders in Congress but reiterated in a speech that he would not give in to Republican demands to roll back his healthcare programme in exchange for reopening the government.
Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said the partial shutdown of the U.S. government will hurt growth in the last quarter of this year.
"The uncertainty surrounding the U.S. political standoff is pushing investors to lock in profits," said Dongbu Securities analyst Lee Eun-taek, adding that material industry-related shares which have risen recently were the main targets.
Shipbuilders were struck heavily by profit-taking, with Hyundai Heavy Industries Co Ltd and Daewoo Shipbuilding & Marine Engineering Co Ltd declining 3.2 percent and 2.8 percent, respectively. The sector fell 2.6 percent as a whole, dragging down the broader market.
The main bourse rose initially as large-cap Samsung Electronics Co Ltd, which accounts for 16.1 percent of the KOSPI's total market capitalisation, estimated its third-quarter earnings at a record high of 10.1 trillion won ($9.4 billion) earlier in the day.
After rising as high as 1.7 percent, it was up a modest 0.3 percent as of 0200 GMT.
Battery maker Samsung SDI Co Ltd fell 3 percent after Tesla Motors Co shares plunged overnight on the latest in a strings of problems for the batteries used in electric vehicles.
Hyundai Motor Co and its affiliate Kia Motors Corp rose 1 percent and 1.6 percent, respectively, on bargain-hunting following sharp declines on Wednesday on weak September sales.
Foreigners, the main driver of the Seoul market in recent months, were poised to extend their net buying streak to a 27th consecutive session in the morning, purchasing 156.2 billion won worth of local shares.
Decliners outnumbered gaining shares 619 to 178.
The KOSPI 200 benchmark of core stocks edged down 0.2 percent, while the junior KOSDAQ also fell 0.4 percent. Local markets were closed on Thursday for a public holiday.
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