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Seoul shares off 0.9 pct, poised for biggest drop in 1-mth on Ukraine crisis
March 3, 2014 / 2:55 AM / 4 years ago

Seoul shares off 0.9 pct, poised for biggest drop in 1-mth on Ukraine crisis

* S.Korea benchmark stock index hits 1-week low

* Signs of further slowdown in China also hurt sentiment

* Foreigners on track to snap 6-day net-buying streak

By Se Young Lee

SEOUL, March 3 (Reuters) - Seoul shares skidded in early Monday trade, poised to record its biggest daily drop in nearly a month as escalating geopolitical tensions in Ukraine and a weak China manufacturing reading spooked investors.

The Korea Composite Stock Price Index (KOSPI) was down 0.9 percent at 1,961.70 points as of 0247 GMT, the sharpest decline since a 1.7 percent decline on Feb. 4. The index had earlier touched an intraday one-week low of 1,955.11.

Ukraine mobilised for war and Washington threatened to isolate Russia economically after President Vladimir Putin declared he had the right to invade his neighbour in Moscow’s biggest confrontation with the West since the Cold War.

Further darkening the mood, North Korea fired two short-range missiles into the sea off the east coast of the Korean Peninsula on Monday, South Korea’s defence ministry said. Foreigners were net sellers of stocks in morning trade, on track to snap a six-day streak of inflows.

“The geopolitical risks in Ukraine and Korea prompted investors to consolidate their recent gains,” said Dongbu Securities analyst Lee Eun-taek.

The unwelcome developments came on top of further sobering news on China’s economy, South Korea’s biggest exports market, with the country’s official Purchasing Managers’ Index edging down to an eight-month low of 50.2 in February.

But Dongbu Securities’ Lee believes the KOSPI’s downside will be contained as investors wait to hear from China’s top leaders at the annual parliament meeting later this week. The leaders will discuss implementing a bold set of economic and social reforms unveiled four months ago.

Decliners outnumbered advancers 525 to 242.

Market heavyweights Samsung Electronics Co. and Posco were down 1.9 percent and 1.8 percent, respectively, as investors took money out of the market.

Bucking the trend, shares of Korea Electric Power Corp. were up 0.4 percent on hopes for stronger earnings after the company announced a fresh plan to reduce its debt and boost income.

The KOSPI 200 benchmark of core stocks was down 1 percent, while the junior KOSDAQ was up 0.1 percent. (Additional reporting by Jungmin Jang)

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