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Seoul shares pare gains as automakers slump on stronger won
January 3, 2013 / 2:56 AM / 5 years ago

Seoul shares pare gains as automakers slump on stronger won

* Hyundai Motor slumps as firm won threatens to sap profit

* Samsung Elec down on profit-taking after hitting record-high

* Woongjin affiliates among top winners

By Somang Yang

SEOUL, Jan 3 (Reuters) - Seoul shares eased from a nearly 9-month-high reached earlier on Thursday, with automakers losing ground as the rising local currency threatens to sap their profits.

The Korea Composite Stock Price Index (KOSPI) ticked 0.33 percent lower at 2,024.47 points as of 0244 GMT, after touching 2,042.48 points earlier in the session, its highest intraday level since April 4.

“The KOSPI rose a lot yesterday, extending December’s gains, so there is some profit-taking. Foreign selling on automakers is widening losses,” said Park Seok-hyeon, an analyst at KTB Investment & Securities.

Hyundai Motor fell 3.5 percent as the strengthening won threatens to erode the carmaker’s repatriated earnings. Kia Motors, South Korea’s No.2 automaker after Hyundai Motor, shed 2.7 percent while parts affiliate Hyundai Mobis lost 4 percent.

The won jumped to a 16-month high against the dollar on Wednesday, although it edged down on Thursday. The yen hit a 29-month low versus the dollar before rebounding on Thursday, which should boost the price competitiveness of Japan-built cars in overseas markets.

“The problem isn’t just the strengthening won. It’s the fact that the won is getting firmer while the yen is pulling in the opposite direction. South Korea and Japan are fierce competitors in the automobile sector. This situation will continue to take a toll on Hyundai and Kia shares,” said Lee Seon-yeob, an analyst at Shinhan Investment.

Hyundai Motor supplier Halla Climate Control Corp tumbled as much as 9.3 percent following a media report that its biggest customer, Hyundai Motor Group, plans to change its supplier for the upcoming Sonata sedan.

Index heavyweight Samsung Electronics was down 1.7 percent after recording a lifetime high earlier in the session.

However, advancing shares exceeded decliners 392 to 365.

Among winning shares were Woongjin group members Woongjin Holdings, Woongjin Chemicals and Woongjin Energy, which jumped near 15 percent on hopes of a turnaround as the group restructures its business empire.

The KOSPI 200 benchmark of core stocks was down 0.4 percent, while the junior KOSDAQ 0.3 percent lower. (Additional reporting by Seongwon Chang; Editing by Eric Meijer)

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