* Offshore investors continue to sell on emerging market
* Large-caps such as Naver Corp, Samsung SDI tumble
* Hyundai Merchant Marine bucks market, soars on N.Korea
By Jungmin Jang
SEOUL, Jan 27 Seoul shares slumped to a 5-month
low on Monday morning, as concerns mounted over a continued
flight of capital from emerging markets amid tighter credit
conditions in China and expectations of a further reduction in
The Korea Composite Stock Price Index (KOSPI) was
down 1.7 percent at 1,906.83 points as of 0130 GMT after
touching an intraday low of 1,899.76, its lowest level since
"Investor concerns over the selloff in emerging markets has
overwhelmed the market here," said Han Beom-ho, an analyst at
Shinhan Investment & Securities. "Our market has already been
hit by weak corporate earnings, so people are cautious," he
Emerging market assets were hit by worries about slowing
growth in China as well as political problems in Turkey,
Argentina and Ukraine.
Expectations the U.S. Federal Reserve will further scale
back its stimulus have also hurt sentiment.
In the two-day policy meeting scheduled from Tuesday to
Wednesday, the Fed is expected to cut an additional $10 billion
in its bond-purchasing stimulus programme. This has led to a
shift of funds from emerging markets to the United States as
investors seek higher returns from rising Treasury yields.
With credit conditions getting tighter in China, investors
fret that a flight of capital from emerging markets will hurt
those economies and undermine global growth.
As of last Friday, foreigners have sold a net 837.2 billion
won ($774.9 million) worth of KOSPI shares this year, which has
led to the main index falling more than 3.5 percent so far in
On Monday morning, foreigners offloaded a net 169.5 billion
worth of local shares.
Big-names such as the country's largest search portal
operator Naver Corp and secondary battery supplier
Samsung SDI Co Ltd were among the leading decliners,
dropping 2.5 percent and 4 percent, respectively.
Companies that reported lacklustre earnings also attracted
sellers. Index-heavyweight Samsung Electronics Co Ltd
slipped 1.5 percent and Daelim Industrial Co Ltd
fell 2.8 percent.
All but one of the sub-indexes on the Korea Exchange (KRX)
traded in the red.
The transportation sector bucked the market by
edging up 0.7 percent on the back of Hyundai Merchant Marine Co
Ltd, which jumped 10.7 percent after Northdae Korea
on Friday proposed reunions of families separated since the
Hyundai Merchant Marine is an affiliate of unlisted
conglomerate Hyundai Group, which had operated the shuttered
tourism projects in North Korea since 2008.
Decliners outnumbered advancers 730 to 77.
The KOSPI 200 benchmark of core stocks was down 1.7
percent, while the junior KOSDAQ shed 2 percent.
($1 = 1080.3500 Korean won)
(Reporting by Jungmin Jang; Editing by Shri Navaratnam)