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Seoul shares fall on Fed stimulus cut, weak China survey
February 3, 2014 / 2:20 AM / 4 years ago

Seoul shares fall on Fed stimulus cut, weak China survey

* Foreigners net sell, weigh on main index

* Hyundai Mobis sags on profit taking, LG Elec down on Lenovo

* Shipbuilders sink on 4Q earnings concerns

SEOUL, Feb 3 (Reuters) - Seoul shares moved lower on Monday morning after a two-day holiday closure last week, catching up to news of the U.S. Federal Reserve’s decision to further trim its stimulus, while China’s soft factory data added pressure.

The Korea Composite Stock Price Index (KOSPI) was down 1.1 percent at 1,920.03 points as of 0200 GMT.

“Despite firm fundamentals, the market is still an emerging market, unable to fend itself from the Fed’s tapering influence,” said Oh Tae-dong, an analyst at LIG Investment & Securities. “However, given time, the market will have its chance to differentiate from other emerging markets, but only under the premise of China’s economic sturdiness.”

The Fed on Wednesday announced an additional $10 billion cut in its bond-purchasing stimulus, stoking volatility and capital outflows from emerging markets.

Meanwhile, China’s official Purchasing Managers’ Index eased to an expected six-month low in January, the National Bureau of Statistics said on Saturday, heightening worries of an economic slowdown in South Korea’s largest export market.

Foreigners reflected the weakened risk sentiment by net-selling 187 billion won ($175 million) worth of KOSPI shares near mid-session, decliners outnumbering advancers 558 to 215.

Autoparts maker Hyundai Mobis Co Ltd fell 3.6 percent as investors locked in profits from a 6 percent weekly gain from the previous week on better-than-expected fourth quarter earnings.

LG Electronics Inc dipped 3.3 percent to the lowest level in nearly 1-1/2 years on intensified competition in the saturated high-end smartphone market after Chinese technology company Lenovo Group said it would buy Google Inc’s Motorola Mobility handset unit on Wednesday.

Shipbuilders posted the biggest sector loss on earnings worries, with its sub-index sinking 3.5 percent on the back of Hyundai Mipo Dockyard Co Ltd which fell 5.5 percent.

Investors rotated into defensive plays, purchasing mobile carrier KT Corp and Lotte Food Co Ltd which rose 1 percent and 1.4 percent, respectively.

The KOSPI 200 benchmark of core stocks was down 1.2 percent and the tech-heavy junior KOSDAQ edged 0.7 percent lower.

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