* POSCO loses after reports it in talks to buy Canada mine
* Telecom shares buck trend
SEOUL Dec 4 South Korean shares retreated in
morning trade on Tuesday after data showed that U.S.
manufacturing shrank last month to its lowest level in more than
three years, rekindling concerns about the state of the world's
biggest economy. [ID nL1E8N371D]
The Korea Composite Stock Price Index (KOSPI) ticked
0.56 percent lower at 1929.15 points as of 0129 GMT.
Chinese manufacturing output grew last month for the first
time in more than a year but a surprise contraction in U.S.
factory activity tempered optimism for the health of the world
"The manufacturing data in China and Europe were good, but
the key is the U.S. economy. The U.S. manufacturing sector
remains lacklustre, weighing on the stock market today," said
Cho Young-hyun, an analyst at Hana Daetoo Securities.
"The stalled U.S. budget talks will curb the short-term
rally of the KOSPI. But I expect the U.S. manufacturing data to
rebound in December, as consumer sentiment is improving because
of rising prices of assets such as homes, stocks and bonds," he
POSCO lost 2.2 percent after news that the South
Korean steelmaker had retained exclusive negotiating rights to
acquire a stake in a Canadian iron ore mine operator controlled
The Korea Economic Daily reported on Tuesday that POSCO has
invited South Korea's National Pension Service to act as a
financial investor in the deal expected to be worth more than $1
"Investors have no problems with POSCO seeking to secure
steelmaking materials, but the price does matter. Investors are
concerned about potentially high acquisition prices, which are
sending POSCO shares down today," said Kim Yun-sang, an analyst
at LIG Investment & Securities.
Hyundai Motor trimmed earlier gains stemming
from its solid U.S. sales figures in November, falling 0.7
Telecom stocks, regarded as defensive stocks because of
their stable dividends, bucked the market decline, with LG Uplus
up 2.1 percent and KT rising 0.8
Banks and securities firms were among the worst performers,
with the bank sub-index down 1.2 percent and
securities sub-index losing 1.1 percent.
(Reporting by Hyunjoo Jin; Editing by Eric Meijer)