(Updates to mid-morning)
By Park Jung-youn
SEOUL, June 3 (Reuters) - Seoul shares fell on Tuesday after
downgrades on the debt ratings of major U.S. securities firms
indicated that the global credit crunch is far from over, sending
Wall Street shares lower and depressing market sentiment.
Financials such as Kookmin Bank 060000.KS and Shinhan
Financial Group (055550.KS) suffered after Standard & Poor's move
Monday to cut debt ratings on Lehman Brothers Inc LEH.N,
Merrill Lynch & Co Inc MER.N and Morgan Stanley (MS.N)
[nN02565648].
Kookmin Bank slipped 1.09 percent to 63,400 won and Shinhan
Financial Group was down 2.34 percent to 50,100 won. Some
brokerages also joined the downward run, with Samsung Securities
(016360.KS) down 1.88 percent to 73,000 won and Woori Investment
& Securities (005940.KS) down 1.83 percent to 21,400 won.
The Korea Composite Stock Price Index fell 1.06 percent to
1,827.86 points, nearly 4 percent off its yearly high of 1,901
reached on May 19.
"[S&P's ratings downgrade] put credit crunch issues in the
spotlight again, prompting foreign investors to sell Seoul shares
after four consecutive sessions of net buying," said Kim
Joong-hyun, a market analyst at Goodmorning Shinhan Securities.
"As the macroeconomic outlook becomes increasingly uncertain,
investors are locking in profits on their biggest gains, hence
the fall in tech issues," Kim added.
Technology shares were also under pressure amid ongoing
worries about the impact of inflation and a slowing global
economy on demand for electronic goods, sending Samsung
Electronics (005930.KS) down 1.65 percent to 714,000 won and LG
Electronics (066570.KS) down 2.45 percent to 139,500 won. Shares
in LG Display (034220.KS) also shed 2.76 percent to 44,050 won.
STEEL MAKERS STAND OUT
However shares in steel makers such as POSCO (005490.KS) and
Dongkuk Steel (001230.KS) rose after Dongkuk said on Monday that
it would hike steel rod prices by 80,000 won per tonne.
"News of the price hike has boosted Dongkuk shares," said Lee
Joong-hyun, an analyst at Dongbu Securities.
POSCO rose 1.57 percent to 584,000 won on expectations that
the world's No.4 steel maker is likely to raise prices on its own
products in the third quarter, analysts said.
Retailers continued to face pressure a day after South
Korea's May consumer price index data showed inflation hit its
highest in 7 years, fanning worries about the rising costs of
goods and energy.
Lotte Shopping Co Ltd (023530.KS) was down 1.43 percent to
344,500 won and Shinsegae Co Ltd (004170.KS) was down 2.36
percent to 579,000 won.
Meanwhile persistent strength in oil prices, which remained
above $127 per barrel, weighed on shares in energy-sensitive
airlines, pushing Korean Air Line (003490.KS) down 1.5 percent to
52,400 won and Asiana Air Lines (020560.KS) down 2.04 percent to
5,760 won.
