* KOSPI down 0.88 pct
* Reports of N.Korean leader's illness worry investors
* POSCO down ahead of Q2 results
(Updates to mid-morning)
By Jungyoun Park
SEOUL, July 13 (Reuters) - Seoul shares fell on Monday,
weighed down by reports North Korean leader Kim Jong-il has
pancreatic cancer, but news of an imminent trade deal with the
European Union helped some exporters.
The Korea Composite Stock Price Index (KOSPI) was
down 0.88 percent at 1,415.99 points as of 0130 GMT.
"Speculation that Kim Jong-il is suffering from pancreatic
cancer has negatively affected markets...such news highlights
South Korea's geopolitical risks and the one thing that investors
hate is any uncertainty," said Lee Kyoung-su, a market analyst at
Taurus Investment & Securities.
North Korean leader Kim Jong-il has pancreatic cancer and the
illness is life-threatening, South Korean broadcaster YTN said on
Monday based on information gathered by Chinese and South Korena
intelligence sources. [ID:SEO323451]
"The news comes when the index has neared its year high, and
investors who were looking for selling opportunities are
offloading shares," Lee said.
Shares in POSCO (005490.KS), which was hit by lower output
and earlier than planned price cuts in May, fell 1.26 percent as
the world's No.4 steelmaker is expected to report its lowest
underlying profit since it started releasing quarterly results in
2000. [ID:nSEO326042]
But some exporters such as auto parts maker Hyundai Mobis
(012330.KS) outperformed after news on Sunday South Korea and the
European Union had tentatively reached a free trade deal that
will boost their $100 billion two-way trade, and would likely
announce it on Monday. [ID:nSEO334261]
Hyundai Mobis was down 0.43 percent, while Hankook Tire
(000240.KS) was up 0.63 percent.
"Hyundai Mobis is expected to enjoy tariff cuts on its parts
exports to Europe," said Cho Soo-hong, an analyst at Hyundai
Securities.
Banks retreated, with KB Financial Group (105560.KS) losing
1.81 percent and Korea Exchange Bank (KEB) (004940.KS) shedding
1.44 percent, after KB Financial Group said late on Friday it
would raise a lower-than-announced 1 trillion won ($782 million)
in a new share sale next month, throwing its banking expansion
plan into doubt. [ID:nSEO221280]
"KEB is falling more than its peers amid disappointment over
the size of KB Financial's rights issue, which stoked concerns it
may not go for KEB," said Park Jung-hyun, an analyst at Hanwha
Securities.
Elsewhere shares in NCSoft Corp (036570.KS) tumbled 7.76
percent on talk trials, or beta tests, of its new online game
"Aion" in Japan and Taiwan were not met with as much enthusiasm
as anticipated.
"Even during the weekends, the trial service reportedly did
not draw many people, and the talk is pressuring stocks," said
S.T. Hwang, an analyst at Hana Daetoo Securities.
Hwang added that news Mirae Asset Investment Management Co.
had been selling down NCSoft shares also weighed on sentiment.
According to a Korea Exchange filing on Friday, Mirae Asset
had trimmed its stake in the online game developer to 16.13
percent from 16.96 percent in early July.
(Editing by Jonathan Hopfner)
