* KOSPI falls 0.3 pct
* Financials lose on profit-taking
* Automakers regain ground as won eases
* LG Elec, S-Oil fall on weak earnings
SEOUL, Jan 31 Seoul shares succumbed to
profit-taking on Thursday after two days of gains, with
financials leading the index lower amid concerns about the
health of domestic corporate earnings and the U.S. economy.
The Korea Composite Stock Price Index (KOSPI) has
underperformed Asia shares this month, weighed down by a
stronger local currency that eats into the value of overseas
earnings of its tech and auto exporters.
It managed to stage a small rally after marking it lowest
point in over a month on Jan. 28 but the upside for now looks
capped and it was trading 0.3 percent lower at 1,958.41 points
as of 0247 GMT.
"The market momentum remains weak, hurt by worries that
corporate earnings will slow down," said Park Seok-hyun, an
analyst at KTB Investment & Securities.
Sentiment was hurt after the U.S. Federal Reserve said on
Wednesday that the growth in the world's biggest economy had
stalled while data showed that the U.S. economy fell unexpected
in the December quarter.
But auto shares rebounded after the South Korean government
warned of stronger capital flow controls to curb speculation,
pushing the South Korean won lower.
Hyundai Motor, South Korea's top automaker,
firmed 1.2 percent, while second-ranked Kia Motors
gained 2.6 percent.
LG Electronics was the latest company to miss
consensus forecasts and its stock fell 1.9 percent as weak
profitability in its TV division overshadowed a recovery for its
Morgan Stanley slashed its outlook for LG Electronics' 2013
operating profit by 14 percent to 1.24 trillion won, reflecting
the firm's weak guidance and the firmer South Korean currency.
Among financials that fell after recent sharp
gains, Shinhan Financial Group lost 3.7 percent,
while KB Financial Group fell 3.4 percent.
Ssangyong Motor jumped by the daily limit of 15
percent after rival political parties agreed to form a joint
body to discuss the automaker's layoffs in 2009 and other
issues. The move eased political uncertainty over the automaker,
and may help avoid a parliamentary probe demanded by labour
circles, analysts said.
S-Oil fell 2 percent after the refiner reported
that its operating profit slumped 82 percent to 71.7 billion won
in the December quarter, from a year earlier.
(Reporting by Hyunjoo Jin; Editing by Edwina Gibbs)