Foreigners buy Seoul shares for 32nd straight session but US, China worries cap gains

Sun Oct 13, 2013 10:22pm EDT

Related Topics

(Updates to midday)

* Approaching U.S. debt deadline (Oct 17) adds pressure

* Foreigners position to extend net-buying streak to 32

* Potential shift in energy policy effects related shares

SEOUL, Oct 14 (Reuters) - Foreigners were on track to buy South Korean shares for a 32nd consecutive session on Monday but gains were capped by fears of a U.S. debt default and disappointing export data from China.

Foreigners purchased 69.2 billion won ($64.59 million) worth of local shares in the morning, underpinning the main bourse.

The Korea Composite Stock Price Index (KOSPI) edged 0.1 percent lower to 2,022.44 points by 0150 GMT after touching an intraday high at 2,026.79.

"Sentiment was weighed down by a mix of concerns from two of Korea's two largest export markets: the U.S. and China," said LIG Investment & Securities analyst Ted Oh, referring to the unsettled U.S. default concerns and China's weaker-than-expected export data released at the weekend.

Oh added, "High expectations on China's economic recovery may backfire on the main bourse."

U.S. Senate negotiations to bring a fiscal crisis to an end showed signs of progress on Sunday, but there were no guarantees the federal government shutdown was about to end or that a historic debt default would be avoided.

On Saturday, China reported a surpruse export drop of 0.3 percent in September from a year earlier, underscoring concerns about soft global demand. China is set to release its third-quarter gross domestic product (GDP) data on Friday, with a Reuters poll forecasting a 7.8 percent rise.

South Korean energy and chemical stocks outperformed after the Energy Ministry said on Sunday it agreed to a reduction of electricity genereated by nuclear power to a range of 22-29 percent, shifting away from a previous 41 percent proposal in a government plan for 2030.

Samchully Co Ltd and Korea District Heating Corp responded positively by rising 1.5 percent and 3.9 percent, respectively, on expectations of sales increase in the future due to a likely policy shift.

Korea Gas Corp (KOGAS) advanced 5.2 percent on the news as well as its bullish September sales announced on Friday which rose 11.2 percent from a year earlier.

Lotte Chemical Corp and LG Chem Ltd rose 1.6 percent and 2.6 percent, respectively.

SK Hynix Inc dropped 1.8 percent as investors locked in profits, coming off of a 2.8 percent weekly rise.

Samsung Electronics Co Ltd, the largest company by market capitalisation, rose a mere 0.2 percent, while Hyundai Motor Co, the second largest, fell 0.4 percent in the morning.

Decliners outnumbered advancing shares 490 to 279.

The KOSPI 200 benchmark of core stocks was flat, while the junior KOSDAQ edged down 0.1 percent. ($1 = 1071.4000 Korean won) (Reporting by Jungmin Jang; Editing by Kim Coghill)

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