(Updates to mid-morning)
SEOUL, May 28 (Reuters) - Seoul shares advanced
Wednesday, led by tech firms and airlines, after a sharp decline
in oil prices eased worries about consumer sentiment and
corporate profits, lifting Wall Street overnight.
However shares in LG Electronics (066570.KS) fell sharply at
the market's opening, dropping as much as 3.96 percent before
trimming losses, on speculation that it may bid for U.S.
conglomerate GE's (GE.N) appliance unit.
Other technology issues rose after their U.S. peers rallied
on hopes a near-3 percent decline in oil prices will help shore
up consumer and business spending.
Samsung Electronics (005930.KS) rose 1.42 percent to 712,000
won and Hynix Semiconductor (000660.KS) climbed 0.68 percent to
29,650 won.
Oil fell $4 to $128 a barrel, pulled by the stronger U.S.
dollar and on concerns moves to cut Asian fuel subsidies could
hurt demand growth.[ID:nSP23355]
The Korea Composite Stock Price Index was up 0.15 percent to
1,828.01 points shortly after opening.
"We saw a technical rebound yesterday after a week of losses,
and it appears that gains will stop here for now," said Le
Kyoung-su, a market analyst at Daewoo Securities.
"While oil prices have eased somewhat, they still remain
high, and volatility in the foreign currency market is
contributing to investors' uncertainty about the macroeconomic
environment," Lee added.
Shares in LG Electronics fell 1.08 percent to 137,500 won
after GE chairman and chief executive Jeff Immelt said on
Wednesday that LG Elec was "clearly one of the leading
candidates" for its struggling appliance unit, valued by analysts
at $4 to $8 billion.
However analysts said the world's No.4 handset maker was
unlikely to pursue the deal considering the enormous price tag
and overlap between the businesses.
"GE is not exactly a high-end appliance name in the U.S. and
does not fit so well with LG's strategy focus on becoming a
premium appliance maker," said Steve Lee, an analyst at
Goodmorning Shinhan Securities.
"Besides, the price tag is simply huge. Unless we see the
unit offered at half the price that's being talked about, which
is highly unlikely, I do not see the deal happening," Lee said,
adding that Immelt's comments were probably aimed at "drumming up
interest."
Carriers such as Korean Air Line (003490.KS) and Asiana
Airlines (020560.KS), which had lost ground in recent weeks on
the back of jet fuel cost worries, rebounded on easing oil.
Korean Air Line rose 3.94 percent to 50100 won and Asiana
Airlines went up 2.14 percent to 5,720 won.
Retailers also gained on the back of hopes that cheaper oil
may shore up consumer spending, with Lotte Shopping (023530.KS)
up 0.77 percent to 329,000 won and Shinsegae Co Ltd (004170.KS)
up 0.7 percent to 577,000 won.
