*KOSPI up 0.22 pct
*Banks fall on worries about shipyard exposure
*Steel issues rise on China hopes
(Updates to mid-morning)
By Jungyoun Park
SEOUL, March 5 (Reuters) - Seoul shares edged up on Thursday
in volatile trade that saw the main index move in and out of
positive territory, with falls in banks and shipbuilders weighing
on the main index.
The Korea Composite Stock Price Index was up 0.22
percent to 1,061.56 points as of 0223 GMT, but down from the
earlier high of 1,074.56 points.
"China momentum is moving markets up today, lifting steel
issues that tend to respond sensitively to Chinese economic
trends," said Choi Seong-lak, a market analyst at SK Securities.
"But gains will not likely be sustained as overriding
financial system problems in the United States are still far from
being solved," Choi added.
"Chinese stocks, which are attracting much focus today, have
trimmed their gains. Investors are moving to lock in profits,"
said Kim Hak-kyun, a market analyst at Korea Investment &
Securities.
China will increase spending in areas such as infrastructure
and manufacturing on top of the 4 trillion yuan ($584.7 billion)
stimulus package unveiled in November, a senior economic planning
official said on Wednesday.[ID:nBJC000263]
But South Korean banks fell across the board after a local
media report late on Wednesday that Jinse Shipbuilding saw the
cancellation of a large foreign ship order, renewing worries
about their exposure to the shipbuilding industry and related
project financing investments, according to analysts.
Medium-sized Jise Shipbuilding, reportedly already in a
government-sponsored debt work out program, saw the cancellation
of a large ship order from Greece and is obliged to give back
some prepayments, the Korea Economic Daily reported.
"Banks could be held liable for whatever obligations Jinse
has. Banks' exposure to small and medium-sized shipbuilders amid
mounting order cancellations is causing concern at this point,"
said Hwang Hun, an analyst at Woori Investment & Securities.
Woori Finance Holdings (053000.KS) lost 2.75 percent and Hana
Financial Group (086790.KS) retreated 2.75 percent.
Shipbuilders also fell, with Hyundai Heavy Industries
(009540.KS) shedding 1.63 percent and Samsung Heavy (010140.KS)
down 1.53 percent.
"Major shipbuilders like Hyundai and Samsung are far from
having cash problems. The piles of cash sitting in their baskets
may have dipped a bit, but there are still plenty. Also while we
have not seen many ship orders lately, the major players are
still sitting on three years worth of orders," said Cho In-karp,
an analyst at Goodmorning Shinhan Securities.
"Today's fall are mostly due to investors moving fast to lock
in yesterday's big gains," Cho added.
But steelmakers rose, fuelled by hopes for an increase in
China's infrastructure spending and after their U.S. peers jumped
overnight.
POSCO (005490.KS) was up 1.25 percent and Hyundai Steel
(004020.KS) climbed 4.8 percent.
(Editing by Jonathan Hopfner)
