* KOSPI hits 1-week intra-day low, inflation data shrugged
* Won falls as dollar shrugs off recent data to post gains
SEOUL, Sept 2 Seoul shares slid to their lowest
level in a week on Tuesday morning, amid worries over sluggish
growth in Europe and China and effects of that on South Korea's
The Korea Composite Stock Price Index (KOSPI) was
down 0.64 percent at 2,054.66 points as of 0205 GMT.
Surveys on Monday showed weaker manufacturing sectors in
China and Europe. A euro zone index fell to its lowest level in
over a year, signalling a red flag on global demand. South Korea
already is experiencing tepid export growth.
"From a valuation point of view, the market is slightly
overheated and dwindling earnings per share coupled with
worsening export conditions are providing little incentive for
investors to push ahead," said Kang Hyun-gi, an analyst at IM
Investment Securities Research Center.
Market reaction was muted after data from the central bank
showed South Korea's annual inflation in August eased to its
lowest in five months, giving the central bank sufficient room
to cut interest rates again to spur economic
"Although the Bank of Korea is likely to maintain its stance
that leans toward easing, it's hard to see them taking any
action so soon after last month's rate cut," said Park Sang
Hyun, an economist at HI Investment & Securities.
Samsung Engineering, which soared 12.5 percent
on Monday in the wake of a $2.5 billion tie-up with Samsung
Heavy Industries, fell 2.1 percent as investors took
a second look at the effects of the merger.
"The synergy effect between the two firms may have positive
effects in the long run, but there's an immediate concern over
Samsung Engineering's loss-making current projects and its
implications on earnings," wrote Daishin Securities in a note to
Shares in SK Holdings Co Ltd rose 1.9 percent
after media reports of a potential merger with tech subsidiary
SK Holdings officials declined comment, and the Korea
Exchange has requested the company to submit a regulatory filing
to clarify its position on the matter by 0700 GMT.
The South Korean won fell as the dollar gained
ground, hitting a 7-month high against the yen, with investors
looking beyond soft recent data to maintain their long-term
optimism on the U.S economy.
The won was trading at 1,015.3 to the dollar as
of 0205 GMT, compared to Monday's session close of 1,013.1.
Investors will watch for signs of further easing from the
European Central Bank's Thursday policy meeting.
September futures on three-year treasury bonds
ticked 2 basis points higher to trade 107.03.
0205 GMT Prev close
Dollar/won 2,054.66 2,067.86
Yen/won 9.6972/7048 9.7030
*KTB futures 107.03 107.01
KOSPI 1,015.3 1,013.1
* Front-month futures on three-year treasury bonds
(Reporting by Joonhee Yu; Editing by Richard Borsuk)