Reuters logo
South Korea shares end lower as automakers lose ground
May 7, 2013 / 6:52 AM / 5 years ago

South Korea shares end lower as automakers lose ground

* Market cautious before BOK rate meeting, options expiry

* Automakers tumble on labour worries, yen weakness

* Foreign investors sell for a fourth straight session

By Jungyoun Park

SEOUL, May 7 (Reuters) - South Korean shares erased earlier gains and ended down 0.4 percent on Tuesday, as the won currency’s strength dampened exporters, while caution ruled ahead of the Bank of Korea’s policy meeting and options expiry later in the week.

The Korea Composite Stock Price Index ended at 1,954.35 points, down for a second-straight session but still up about 3 percent from mid-April when the market hit a 5-month low.

“The market is taking a breather as the won’s strength has prompted profit-taking on exporters in the auto sector in particular,” said Choi Un-sun, a market analyst at LIG Investment & Securities.

Investors were also anxious to see whether the central bank was willing to step up efforts to support the economy, said Cho Byung-hyun, analyst at Tong Yang Securities.

The central bank’s interest rate decision and the expiry of monthly KOSPI index options are due on Thursday.

Foreign investors were sellers of a net 216.5 billion won worth of stocks, offloading stocks for a fourth-straight session.

Automakers led declines, with Hyundai Motor falling 2.3 percent and Kia Motors down 2 percent.

“There are talks weekend shifts are not being enforced,” said Ryu Yeon-hwa, an analyst at IM Investment & Securities, adding that would negatively affect manufacturing efficiency.

Weakness in the yen was also hurting automakers as it renders Japanese cars more price-competitive. The yen bounced back from a 10-day low versus the dollar on Japanese exporters’ buying after a long weekend in Japan, though many traders expect the currency to stay under pressure.

Telecommunication stocks rallied. SK Telecom rose 3.4 percent and KT finished up 1.3 percent.

LG Uplus, the third-biggest wireless carrier in South Korea, surged 3.5 percent and was the most heavily traded share on the main KOSPI.

Wireless carriers were seen posting stronger earnings in the second quarter as they continue to slash marketing costs, said Steve Hwang, an analyst at Hana Daetoo Securities.

Airlines and tour issues advanced as warm weather sparked prospects for summer vacation travel amid expectations that strength in the local currency could also fuel demand.

Korean Air Line climbed 1.5 percent and Hana Tour, an on-and-offline tour agency, ended up 3.1 percent.

Technology exporters lost ground on the back of the won currency’s strength. The won steadied on Tuesday after hitting an 8-week high on Monday.

Samsung Electronics fell 1.4 percent and SK Hynix lost 1 percent.

Chemical shares continued to climb as crude oil prices rallied to a one-month high, pointing to strength in product pricing.

SK Chemicals advanced 1.7 percent and Samsung Fine Chemicals gained 1.5 percent.

The KOSPI 200 benchmark of core stocks erased 0.5 percent while the junior KOSDAQ finished up 1.2 percent. (Reporting by Jungyoun Park; Editing by Jacqueline Wong)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below