Seoul stocks edge down on profit-taking, won firms

Sun May 18, 2014 11:17pm EDT

* Foreign buying underpins the main bourse
    * Won moves sideways amid intervention caution

    SEOUL, May 19 (Reuters) - Seoul shares inched lower on
profit-taking early on Monday, though buying by overseas
investors helped limit losses, while the won stayed
strong on demand from exporters.
    The Korea Composite Stock Price Index (KOSPI) was
down 0.2 percent at 2,009.57 points as of 0240 GMT after
touching an intraday low of 2,002.89. The KOSPI rose 2.9 percent
last week, its strongest weekly gain since late August 2013.
    "The market is taking a breather with the investor focus
shifting towards macroeconomic indicators due this week amid
declining U.S. and European bond yields that suggest a slowdown
in the global economic recovery," said Chang Hee-jong, an
analyst at Hana Daetoo Securities.
    Expectations that the European Central Bank is preparing a
package of policy options for its early June meeting, including
cuts in all of its interest rates, depressed bond yields not
only in Europe but also in the United States last
week. 
    Preliminary factory activity surveys for the United States,
China and the euro zone are due later this week. 
    Foreign investors purchased a net 13 billion won ($12.7
million) worth of KOSPI shares on Monday morning. In a four-day
buying streak through Friday, they had bought a net 1.4 trillion
won worth.
    Heavyweight names declined on profit-taking, with memory
chip maker SK Hynix Inc dropping 2.8 percent and
steelmaker POSCO slipping 1.5 percent. Hyundai Motor
Co, the second-largest component in the KOSPI, fell
1.7 percent.
    Daewoo Engineering & Construction Co Ltd slipped
1 percent despite news on Monday that it had won a 560.3 billion
won ($547 million) order to build degassing stations in Iraq's
Zubair oil field for Eni Iraq B.V., an affiliate of Eni SpA
.
    Meanwhile, the won strengthened slightly but gains
were limited amid caution over possible intervention by Seoul's
foreign exchange authorities to halt its rise. The currency hit
a near six-year high on the dollar this month.
    The won was quoted at 1,022.7 against the dollar
as of 0240 GMT, up 0.1 percent from Friday's onshore close at
1,024.0.
       
                       0240 GMT    Prev close
 Dollar/won            1,022.7       1,024.0
 Yen/won           10.0758/660       10.0760
 *KTB futures           105.97        105.98
 KOSPI                2,009.57      2,013.44
 * Front-month futures on three-year treasury bonds
($1 = 1024.0500 Korean Won)

 (Reporting by Jungmin Jang; Additional reporting by Joyce Lee;
Editing by Chris Gallagher)