February 1, 2013 / 2:36 AM / 5 years ago

Seoul shares fall after China data, builders lose ground

* China data fuels concerns about pace of economic recovery

* Doosan E&C tumbles on rights issue speculation

SEOUL, Feb 1 (Reuters) - Seoul shares started February trade on a weak note after China’s official purchasing managers’ index missed expectations, while builders fell on concerns over the lacklustre property sector.

The Korea Composite Stock Price Index (KOSPI) ticked 0.7 percent lower to 1,947.89 points as of 0203 GMT on Friday, after opening up 0.14 percent.

China’s official PMI eased to 50.4 in January, missing market expectations and underscoring that the economy is making only a mild recovery from its weakest year since 1999.

“The latest China data weakened expectations about the pace of its economic recovery,” said Park Sung-hoon, an analyst at Woori Investment & Securities.

“But the downside will be limited for the domestic stock market, which is attractive in terms of valuations, after having underperformed the U.S. and other markets,” he said.

But a separate survey showed growth in China’s manufacturing sector hit a two-year in January, pointing to the recovery momentum slowly gaining traction.

South Korea’s exports in January grew at the fastest pace in 11 months but a private survey showed that manufacturing activity shrank marginally, underscoring weak underlying conditions.

Builders slipped after speculation that Doosan Engineering & Construction may issue new shares re-ignited jitters about the sluggish housing market. The builder was asked by the bourse operator to clarify the market rumours by 0900 GMT.

Doosan Engineering & Construction dived 10.3 percent, while its top shareholder Doosan Heavy Industries and Construction slumped 6.4 percent.

Defensive, domestic-focused stocks defied market falls, with Korea Electric Power firming 2.8 percent and Korea Gas up 1.8 percent.

Among heavyweights, Samsung Electronics declined 1.3 percent, while Hyundai Motor extended gains, inching up 0.3 percent. (Reporting by Hyunjoo Jin; Additional reporting by Seong-won Chang; Editing by Jacqueline Wong)

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