Seoul shares end above lows; tech, financials fall

By Park Jung-youn

SEOUL, June 23 (Reuters) - Seoul shares fell to a 12-week closing low on Monday led by financials and tech issues, but the index cut earlier 2 percent losses on a view it may have reached a bottom after sliding 10 percent since mid-May.

The Korea Composite Stock Price Index closed down 0.89 percent to 1,715.59 points, up from the session's low of 1,694.79 points. It is also up 11.6 percent from the mid-March low of 1,537.53, but down 9.7 percent from the year's high of 1,901 reached mid-May.

"Some buying took place on views that the shares were oversold. Market perception is that the U.S. indexes like the Dow may have hit bottom on Friday," said Lee Sun-yeob, a market analyst at Goodmorning Shinhan Securities.

However analysts said investors remain wary in the run-up to a two-day Federal Reserve interest rate meeting starting Tuesday.

"The market will tune into any implications about when the rate raise will be, and where the Feb's views on current U.S. economy and financial markets stand," Lee added.

"Regional markets also made below-1 percent losses as investors sought bargains after their latest massive falls," said Juhn Chong-kyu, a market analyst at Samsung Securities.

Shares in LG Electronics (066570.KS) fell for a fourth consecutive session losing 3.52 percent to 123,500 won on worries that handset market competition will intensify after the launch of Apple's (AAPL.O) much-hyped new iPhone.

"Apple's iPhone [pricing at $199] was rather unexpected. It does raise worries about South Korean handset makers," said Steve Lee, an analyst at Goodmorning Shinhan Securities.

Steelmakers such as POSCO (005490.KS) and Hyundai Steel (004020.KS) fell on worries about steel products demand on the back of ongoing worries about global economic slowdown and mounting inflation pressure.

POSCO fell 2.36 percent to 539,000 won, extending its losses on the news that Vietnam's state-run ship builder Vinashin has cancelled plans to invest $1 billion in a $5-billion steel mill joint venture with the world's No.4 steel maker, part of government efforts to cut spending to reduce inflation running at 25 percent [ID:nSP53612].

Hyundai Steel lost 1.76 percent to 78,100.

Memory chip makers such as Samsung Electronics (005930.KS) came under pressure on an increasingly grim outlook for tech sectors after a U.S. brokerage downgraded its rating on Sandisk Corp (SNDK.O), stoking worries that current inflation pressure may dampen consumer demands for electronics goods.

Samsung Elec lost 1.5 percent to 658,000 won and Hynix closed flat at 27,950 won.

Hyundai Motor, South Korea's biggest carmaker, also retreated after S&P said it may cut its ratings on U.S. carmakers such as General Motors GM.N and Chrysler LLC, citing financial damage from high gasoline prices [ID:nN20284169].

Hyundai Motor (005380.KS) slid 1.92 percent to 76,700 won, and Kia Motors (000270.KS) fell 2.12 percent to 11,550 won.

Financials such Hana Financial Group (086790.KS) and Woori Finance Holdings (053000.KS) retreated after talk of profit warnings and additional write-downs on mortgage holdings by U.S. investment banks.

Hana fell 2.31 percent to 40,200 won and Woori lost 1.69 percent to 17,400 won.

However, shares in Hankook Tire (000240.KS) South Korea's top tyre maker, rose 0.33 percent to 15,150 won on market speculation that French tyre maker Michelin (MICP.PA) may be buying more shares in Hankook after it raised its stake to 8.9 percent on June 18. [ID:nSEO149519]

Also bucking the trend Lotte Confectionery Co Ltd (004990.KS) rose 4.0 percent to 1,249,000 won after the company said it planned to acquire Belgian chocolate maker Guylian NV for 105 million euros ($164 million) [ID:nSEO31580].