(Updates to mid-morning)
SEOUL, Dec 26 (Reuters) - Seoul shares were little changed on
Wednesday, as lenders such as Kookmin Bank extended gains
following a foreign capital injection into Merrill Lynch, while
brokerages fell as the pre-Christmas stock rally lost steam.
Exporters including Hynix Semiconductor Inc also advanced on
eased concerns about possible stagflation in the United States,
South Korea's No.2 export destination.
"Concerns about the U.S. economy have been easing and
investors are increasingly betting that global markets have
pretty much reflected such risks," said Kang Moon-seok, an
analyst at Korea Investment & Securities.
"But local markets could struggle in the rest of the year
because today is the last trading day that entitles buyers to
year-end dividend payments. Investors seem to be moving fast to
brace for expected falls from tomorrow."
The Korea Composite Stock Price Index (KOSPI) fell
0.28 percent to 1,914.15 points as of 0113 GMT, giving up part of
its 4 percent jump in the past two sessions.
Financials marched ahead, tracking global peers after Merrill
Lynch & Co Inc MER.N, hit by huge subprime mortgage losses,
said it would increase its capital with an investment from
Singapore's Temasek Holdings and Davis Selected Advisers.
[ID:nN24311966]
Top lender Kookmin Bank 060000.KS rose 0.55 percent to
72,900 won and second-ranked Shinhan Financial Group (055550.KS)
advanced 0.9 percent to 56,200 won.
Growing expectations that a pro-market incoming government
under president-elect Lee Myung-bak would scrap a rule
prohibiting conglomerates from owning domestic banks and bring
about deregulation in the financial sector also continued to prop
up those stocks.
But Woori Financial Group (053000.KS) fell 2.02 percent to
19,450 won after the Wall Street Journal reported the South
Korean government plans to sell a 7 percent stake in Woori to
local and foreign institutions through block trades in January.
[ID:nN24288296]
Hynix Semiconductor Inc (000660.KS), the world's
second-biggest memory chip maker, led exporters higher as
investors increasingly played down the risks of stagflation in
the United States following recent positive economic data.
Hynix gained 1.75 percent to 26,200 won and LG.Philips LCD Co
Ltd (034220.KS) added 0.53 percent to 47,750 won.
But brokerages fell as the strong rally in the past sessions
lost steam, with Samsung Securities Co (016360.KS) shedding 0.67
percent to 88,900 won and Hyundai Securities Co (003450.KS)
falling 2.5 percent to 21,450 won.
(Reporting by Kim Soyoung; Editing by Sei Chong)
