October 24, 2013 / 3:09 AM / in 4 years

Seoul shares steady on China flash PMI, foreign inflows thin

(Updates to mid-morning)

* KOSPI takes breather after 1 pct fall previously

* Foreigners continue to buy local shares, but volume lightens

* Q3 earnings affect Hyundai Glovis, LG Household, S-Oil

SEOUL, Oct 24 (Reuters) - Seoul shares steadied early on Thursday, as an upbeat manufacturing survey offset concerns that China was tightening liquidity while foreign buying eased off due to a strong won.

The Korea Composite Stock Price Index (KOSPI) gained 0.1 percent to 2,037.23 points by 0233 GMT after falling as low as 2,027.93.

“China cues basically cancelled out one another to allow investors to take a breather,” said Shinhan Investment & Securities analyst Han Beom-ho.

Investors are concerned about growth prospects in the world’s second-largest economy after primary short-term money rates rose on concerns the People’s Bank of China was tightening cash supply to ward off risk of credit bubbles and inflation.

However, worries eased slightly as a preliminary survey earlier in the day showed China’s manufacturing sector picked up in October, while new orders marked a seven-month high to suggest the economy may have stabilised.

Foreign investors, the main drivers of the KOSPI’s rise in recent months, were set for a 40th consecutive session of buying. But investors only picked up a modest 43.3 billion won ($41.01 million) worth of local shares in the morning.

“As the won currency continues to firm, European funds that are known to be short term have been exiting the market,” said Lee Eun-taek, an analyst at Dongbu Securities. “However, U.S. investors are continuing to purchase local stocks.”

Corporate earnings results for July-September put companies in two camps. Reacting positively were Hyundai Glovis Co Ltd and LG Household & Healthcare Ltd, which posted increased operating profits from a year ago. Hyundai Glovis jumped 7.3 percent and LG Household advanced 4.3 percent.

In negative terrain was S-Oil Corp, falling 2.6 percent. Earlier in the day, it said its third-quarter operating profits stood at 25.2 billion, a 95.1 percent decline from a year ago.

Meanwhile, Hyundai Motor Co and LG Electronics Inc fell 1.9 percent and 0.9 percent, respectively, ahead of releasing their quarterly earnings.

$1 = 1055.9500 Korean won Reporting by Jungmin Jang; Editing by Jacqueline Wong

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