(Updates to mid-morning)
SEOUL, April 14 (Reuters) - Seoul stocks fell 1.8 percent
early on Monday on fresh U.S. recession worries but steel maker
POSCO (005490.KS) underperformed the wider market, dropping 4.7
percent on concerns profit growth will stall on margin erosion.
The world No.4 steel maker traded at 467,000 won despite
Friday's forecast-beating 5-percent rise in first-quarter net
profit and increased 2008 sales target because it left its
operating profit forecast unchanged, pointing to wavering margins
as it fights to pass on higher ore and coal costs.
Other key steelmakers such as Hyundai Steel (004020.KS) and
Dongkuk Steel (001230.KS) also declined, with Hyundai down 2.95
percent to 72,500 won and Dongkuk down 2.68 percent to 39,950.
The Korea Composite Stock Price Index was down 1.83 percent
to 1,747.22 points as of 0140 GMT, with downward momentum fuelled
by institutions and foreigners' selloffs after weak earnings from
GE (GE.N) and downbeat consumer data pointed to a U.S. recession.
"The report of GE's earnings drop has weighed on investor
sentiment, particularly pressuring shares that have sharply
gained over past couple weeks," said Kim Joong-hyun, a market
analyst at Goodmorning Shinhan Securities.
"Latest data is indicating that the U.S. economy is headed
for a recession, and this does not bode well for South Korea's
export-oriented market," he added.
South Korea's major exporters such as Samsung Electronics
(005930.KS) and Hyundai Motor (005380.KS) fell, depressed by the
performance of GE, which is viewed as an U.S. economic bellwether
and a major player in South Korea's second-largest export market.
SAMSUNG DOWN
Samsung Electronics fell 1.47 percent to 670,000 won, and
Hyundai Motor fell 0.36 percent to 82,000 won.
Institutions sold a net 112 billion won worth of KOSPI
shares, and foreigners sold a net 40 billion won.
However Hynix Semiconductor Inc (000660.KS), the world's No.2
memory chipmaker, rose 0.69 percent to 29,150 won after the
prices of key NAND flash memory chips rose more than 4 percent on
Friday.
NAND price gain comes in line with Hynix's recent
announcement that its NAND flash memory chip output would fall
short of its initial 2008 target, analysts said.
"Market perception is the prices have bottomed out and will
likely rebound from here. NAND memory chip market could get
better from as early as second quarter this year," said Greg Roh,
an analyst at Korea Investment & Securities.
Financials such as Kookmin Bank 060000.KS and Shinhan
Financial Group (055550.KS) fell on revived earnings concerns
after the financial services arm of GE reported a 20 percent
profit fall, citing a "difficult" financial services environment.
Major U.S. banks including Merrill Lynch MER.N and
Citigroup C.N. are set to report their earnings soon.
Kookmin fell 1.85 percent to 63,500 won and Shinhan lost 2.72
percent to 53,600 won.
(Reporting by Park Jung-youn; Editing by Keiron Henderson)
