(Updates to mid-morning)
By Park Jung-youn
SEOUL, June 19 (Reuters) - Seoul shares traded lower on
Thursday, with transport and exporter issues such as Korean Air
Line (003490.KS) and Samsung Elec (005930.KS) under pressure on
resurgent worries about rising oil prices and a U.S. slowdown.
The Korea Composite Stock Price Index was down 1.40
percent to 1,749.34 points as of 0104 GMT, nearly 8 percent off
the year's intraday high of 1,901 reached in mid-May.
"Investors are staying away from risky assets as they await
important interest rate and oil supply decisions later this
month. Eyes are also on second quarter earnings," said Hwang
Keum-dan, a market analyst at Samsung Securities.
"It also appears that the risks associated with Asian markets
have come into the spotlight lately, particularly inflation and
currency volatility -- another reason for foreign selling," Hwang
added.
Foreigners have been net sellers on the main board for 9
consecutive sessions.
Major exporters such as Samsung Electronics and LG
Electronics (066570.KS) fell across the board after the U.S. Dow
industrials sank to their lowest close in three months overnight
on worries about the world's largest economy.
Samsung was also hit by Taiwanese media reports on alleged
defects in its memory chips [ID:nSEL000140].
Samsung Elec fell 2.98 percent to 683,000 won and LG
Electronics (066570.KS) slid 2.93 percent to 132,500 won.
"Heavy foreign selling is pressuring tech issues today as
worries about the sector deepened after the Dow and Nasdaq's
steep falls yesterday," said Kim Gee-soo, an analyst at
Goodmorning Shinhan Securities.
"DRAM prices are still on a recovery track. But the second
half foreign exchange rate outlook seems to be veering towards a
stronger won, which does not bode well for technology exporters
like Samsung," Kim added.
But Samsung Elec is still up 27 percent on the year as of
Wednesday's closing, and LG Elec up 36.5 percent.
Hyundai Motor (005380.KS) also dropped 2.83 percent to 78,900
won.
Financials such as Kookmin Bank 060000.KS also lost ground
as sentiment towards the sector soured amid weak earnings results
from U.S. banks and persistent credit crunch fears.
Kookmin Bank 060000.KS fell 2.2 percent to 62100 won, and
Shinhan Financial Group (055550.KS) fell 3.5 percent to 46,900
won. Hana Financial Group (086790.KS) lost 4.33 percent to 42,000
won.
Energy-price sensitive issues dropped after U.S. crude CLc1
settled up on Wednesday, raising concerns about profitability.
Korean Air Line fell 1.88 percent to 52,300 won and Asiana
Airlines (020560.KS) lost 1.54 percent to 5,740 won.
Separately, MSCI Barra (MXB.N) said on Wednesday that it will
consider upgrading South Korea from emerging to developed market
status [ID:nN18407492].
