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Seoul shares extend losses on U.S. fiscal uncertainty
November 12, 2012 / 2:15 AM / 5 years ago

Seoul shares extend losses on U.S. fiscal uncertainty

* Uphill battle expected to resolve U.S. fiscal cliff

* Foreign investors continue selling for third day

* Shipbuilders among losers; Woongjin Holdings soars

By Hyunjoo Jin

SEOUL, Nov 12 (Reuters - Seoul shares were headed for their third consecutive day of declines on Monday, weighed down by continued foreign selling, as concerns persisted about looming tax hikes and spending cuts in the United States.

The Korea Composite Stock Price Index (KOSPI) had slipped 0.4 percent to 1,896.15 points as of 0153 GMT.

“The U.S. fiscal cliff is expected to be resolved, but it faces an uphill battle to reach a solution, which will be a drag on stock markets,” said Kim Sung-soo, a fund manager at LS Asset Management.

Statements from U.S. President Barack Obama and House Speaker John Boehner on Friday showed that the two leaders were still far apart over a “fiscal cliff” of automatic tax hikes and spending cuts worth $600 billion, leading U.S. stocks to give up most gains later on Friday.

“There is a consensus that South Korean stocks are cheaper than their peers, but the macroeconomic uncertainty will force analysts to downgrade corporate earnings outlooks for this year and next year,” Kim said.

“The KOSPI lacks catalysts,” he said, expecting the KOSPI to remain in a range around the 1,900-point mark this year.

The shipbuilding sector was among the worst performers, with Daewoo Shipbuilding & Marine Engineering losing 2.7 percent and Hyundai Heavy Industries down 2.6 percent.

Among large-cap stocks, Samsung Electronics and Hyundai Motor traded nearly flat, while POSCO fell 0.9 percent.

But Woongjin Holdings extended its rally, up by its daily limit of 15 percent, after a court approved the $1.1 billion sale of a stake in unit Woongjin Coway. (Editing by Chris Gallagher)

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