S.Korea stocks subdued, won supported ahead of U.S. jobs, holidays

Thu May 1, 2014 10:57pm EDT

* Markets lacklustre before holidays, U.S. jobs data
    * KOSPI on track for 7th day of losses, weekly decline
    * Won ticks up, headed to post a weekly rise

    SEOUL, May 2 (Reuters) - Seoul shares were modestly lower on
Friday morning as investors were cautious before a key U.S. job
report and a two-day holiday next week, with the won 
inching up on upbeat April exports data.
     Shipbuilders struggled on weaker-than-expected first
quarter earnings, with Hyundai Heavy Industries Co Ltd
 and Samsung Heavy Industries Co Ltd 
dropping 3.4 percent and 1.6 percent, respectively.
    The Korea Composite Stock Price Index (KOSPI) was
down 0.2 percent at 1,957.88 points as of 0220 GMT, taking the
index well into the "oversold" territory. 
    The 14-day relative strength index stood at 22.3 morning
trade, quite a way off the 30-mark which indicates stocks are
"oversold" and usually signals a rebound. 
    If the market closes in the red it will mark the seventh
straight session of declines. The benchmark gauge is down 0.7
percent for the week. Local financial markets, which were closed
on Thursday, will shut again on May 5 and 6 for holidays. 
    Global markets were on tenterhooks ahead of the U.S. nonfarm
payroll report for April due later on Friday, with a Reuters
survey of economists predicting an addition of 210,000 jobs, the
fastest clip in five months. 
    Hyundai Securities analyst Bae Sung-young said that signs of
brightening prospects in the U.S. have been partially offset by
worries over slowing growth in China -- South Korea's biggest
export market.
     China on Thursday released its April factory activity
survey at 50.4, up a tick from March but below forecasts of
50.5. The middling result failed to ease concerns about the
economy but neither did it point to a deepening
slowdown. 
    Bae also said that "the pace of the local currency's
appreciation is crimping offshore investors' foreign exchange
profits, and that effect is seen as they continue to offload
local stocks." 
    Foreigners sold a net 58 billion won ($56.1 million) worth
of KOSPI shares in the morning, poised to extend their net
selling streak to a fourth session.
      Some investors picked up defensive names, with mobile
carrier SK Telecom Co Ltd gaining 2.3 percent and
state-run utility company Korea Electric Power Corp 
rising 1.5 percent.
    In the foreign exchange market, the won ticked 
higher on the back of South Korea's strong April export data.
However, possible intervention by local foreign authorities to
curb its strength capped gains.
    On Thursday, South Korea said its exports grew the most in
15 months in April as demand from the U.S. firmed, while a
separate data showed its consumer price inflation sped up to an
eight-month high to underscore a broadening recovery in Asia's
fourth-largest economy. 
    The local currency was quoted at 1,031.8 against
the dollar as of 0220 GMT, up 0.1 percent from Wednesday's
onshore close at 1,033.2. For the week, the won is up 0.9
percent, and looks set to snap two straight weeks of declines.
    
                       0220 GMT    Prev close
 Dollar/won            1,031.8       1,033.2
 Yen/won           10.0781/821       10.0894
 *KTB futures           105.85        105.78
 KOSPI                1,957.88      1,961.79
 * Front-month futures on three-year treasury bonds
($1 = 1033.3000 Korean Won)

 (Reporting by Jungmin Jang; Editing by x)
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