(Updates to mid-day)
SEOUL, June 17 (Reuters) - Seoul shares extended losses
around midday on Tuesday as sentiment turned sour after South
Korea's major labour group announced a one-day strike for July,
pressuring shares in construction, steel, and auto sectors.
Construction shares fell across the board a day after South
Korea building workers joined striking truckers, on worries that
construction projects would suffer.
Shares in Hyundai Engineering & Construction (000720.KS)
dropped 5.56 percent to 76,500 won and Daewoo Engineering &
Construction (047040.KS) lost 4.2 percent to 17,100 won.
Hyundai Motor (005380.KS) fell 0.12 percent to 80,900 won
after the company's labour union said on Tuesday that it plans to
join the labour group's strike.
Steelmaker shares also suffered, with POSCO (005490.KS) down
1.81 percent to 541,000 won and Hyundai Steel (004020.KS) down
3.04 percent to 76,600 won on worries that the fast spreading
strike would further cripple the means to transport their
products, with a slowdown in South Korean construction sites also
dampening the sentiment towards the sector.
The Korea Composite Stock Price Index was down 1 percent to
1,742.82 points as of 0341 GMT, after opening 0.31 percent
higher. The index is down nearly 6 percent on the month.
"Sectors that are directly affected by the walkout in
construction and manufacturing sectors are under a lot of
pressure as the strike seems set to be prolonged," said Kim
Joon-kie, a market analyst at SK Securities.
Consumer related stocks dipped on the prospects of widening
strike action with Lotte Shopping (023530.KS) down 2.12 percent
to 323,000 won and Lotte Midopa (004010.KS) 1.83 percent off at
10,700 won.
Analysts also added that Wall Street shares' lacklustre
performance overnight and oil's continued gyrations were keeping
investors at bay.
"The index will hover at around 1,750 points until late this
month, but I expect a rebound in July on earnings expectations.
Recent solid U.S. retail data will likely be reflected in South
Korean exporters' earnings as well," said So Jang-ho, a market
analyst at Samsung Securities.
Analysts also said heavy selling by overseas investors in
both spot and futures market on the back of anxiety over U.S.
bank earnings added to the market volatility.
Meanwhile Hynix Semiconductor (000660.KS) extended its fall
to lose 2.72 percent to 28,600 won after the world's No.2 memory
chip maker said on Tuesday it would buy about 9.5 percent of
ProMOS Technologies (5387.TWO) for $168 million, boosting the
Taiwanese chip maker's shares.
South Korea-based Hynix and smaller peer ProMOS agreed in
early May that Hynix would acquire a stake of up to 10 percent
in ProMOS, either alone or with other financial investors in a
private placement.
Hynix shares had a weak start on local media reports that it
was pondering issuing convertible bonds worth $500 million. Hynix
last week said it was considering an issue but said it had not
made any decisions regarding the exact size or timing.
The news had stoked worries about Hynix's financial status,
analysts said.
