Seoul shares edge higher; China demand and won worries weigh
(Updates to midday)
* Foreigners reposition as buyers, poised to extend streak
* Automakers, SK Hynix down on profit taking
* Shipbuilders, chemicals rise on future earnings outlook
SEOUL, Oct 29 (Reuters) - Seoul shares recovered initial losses and inched higher on Tuesday morning, as shipbuilders and chemical shares rallied to offset pressures stemming from profit taking.
After notching a record 42 consecutive sessions as net buyers on Monday, foreign investors had again appeared set to snap the trend, but repositioned as buyers by purchasing 22.7 billion won ($21.39 million) worth of shares on Tuesday morning.
While the buying came in by late morning, there were clearly concern evident among foreign investors over the strong won, chances that South Korean authorities could act to peg the currency back, and worries that demand could be dampened in country's biggest export market, China.
"The market switched as foreign capital flows altered direction," said Kim Hak-gyun, an analyst at KDB Daewoo Securities. "Jitters about China's credit and strength in the won are clearly affecting offshore investors."
The Korea Composite Stock Price Index (KOSPI) moved 0.2 percent higher at 2,053.12 points as of 0229 GMT after touching as low as 2,039.46.
Investors are watching the release of factory surveys for major economies later this week for a clearer idea of the state of major markets.
Hyundai Motor Co fell 1.5 percent, following a 2 percent rebound in the previous session, as foreign investors took profits due to concerns that the firm's export competitiveness was being hurt by the firm won currency.
SK Hynix Inc, the world's second-largest memory chipmaker, fell 1.4 percent despite posting record quarterly profit due to its rapid rise in recent months.
Shipbuilders and chemicals outperformed, with the sector sub-indexs and gaining 1.8 percent and 1.6 percent, respectively. Daewoo Shipbuilding & Marine Engineering Co Ltd rose 3.1 percent and Lotte Chemical Corp advanced 4.9 percent.
Meanwhile, Dongkuk Steel Mill Co Ltd jumped 6.4 percent after a local media reported it is considering spinning off its slumping steel plate business.
Declining shares outnumbered winners 390 to 387.
The KOSPI 200 benchmark of core stocks was up 0.3 percent, while the junior KOSDAQ edged 0.1 percent higher. ($1 = 1061.0500 Korean won) (Reporting by Jungmin Jang; Editing by Simon Cameron-Moore)
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