*Domestic consumption issues outperform
*Techs, industrial issues fall on economy worries
*Airlines decline on higher oil
(Updates to midmorning)
SEOUL, Aug 26 (Reuters) - Seoul shares traded lower on
Tuesday after credit worries prompted steep falls in their Wall
Street peers overnight, while resurgent oil prices and continued
weakness in the won currency weighed on industrial issues.
The Korea Composite Stock Price Index was down 0.47
percent at 1,495.02 points as of 0104 GMT, recovering after
touching 1,474.64 points, a fresh 16-month low.
"A rapidly weakening won currency is increasing firms'
foreign currency risks, and there are real concerns about
financial risks of those companies with an overexposure to the
forex market volatilities," said Kim Seong-bong, a market analyst
at Samsung Securities.
"On top of that are the U.S. credit risks and the shares'
steep falls. I have to say market sentiment and conditions are
increasingly getting worse, and in the worst case scenario, say
another major U.S. bank going bust, the index could fall to
1,300," Kim added.
The won hit a fresh 4-year low against the dollar as renewed
concerns about the U.S. credit market situation prompted traders
to dump riskier assets.
Technology issues fell across the board as deepening worries
about economies worsened tech firms' earnings outlooks, sending
Samsung Electronics (005930.KS), the world's No.1 memory chip
maker, down 1.6 percent to 551,000 won.
Hynix Semiconductor (000660.KS), the world's No.2 memory chip
maker fell 2.14 percent to 20,600 won. LG Electronics
(066570.KS), a leading maker of handset and household appliances,
also lost 1.42 percent to 104,500 won.
Steelmakers fell across the board as continued weakness in
the won currency makes the cost of importing raw materials
heavier, with POSCO (005490.KS) down 0.86 percent to 460,500 won
and Hyundai Steel (004020.KS) down 2.36 percent to 53,800 won.
Shipbuilders also retreated with Hyundai Heavy Industries
(009540.KS) down 1.41 percent to 244,500 won and Daewoo
Shipbuilding & Marine Engineering (042660.KS) down 2.47 percent
to 35,600 won.
Meanwhile oil's gains to above $115 per barrel pressured
airlines, pushing Korean Air Line (003490.KS) 1.8 percent lower
to 40,900 won and Asiana Airlines down 1.65 percent to 4,475 won.
However domestic consumption-focused sectors in retail in
telecommunications outperformed against the broader market. KT&G
(033780.KS), South Korea's tobacco monopoly, was trading 0.44
percent higher at 90,900 won, and SK Telecom (017670.KS), South
Korea's top mobile phone operator, was up 0.76 percent to 200,000
won. KTF 032390.KS, the country's second-biggest wireless
carrier, was trading 2.55 percent higher at 28,100 won.
