May 18, 2009 / 1:52 AM / 11 years ago

Seoul shares down; Hynix up, N.Korea issues fall

 * KOSPI falls 1 pct
 * Limited impact from Kaesong factory deal cancellation
 * Hynix outperforms after asset sale news
 (Updates to mid-morning)
 By Jungyoun Park
 SEOUL, May 18 (Reuters) - Seoul shares declined on Monday, with news that North Korea canceled a deal with South Korea on a factory park weighing on some issues and a weaker won KRW= and recent weakness in crude CLc1 pressuring energy stocks.
 The Korea Composite Stock Price Index .KS11 (KOSPI) was down 1.00 percent to 1,377.84 points as of 0121 GMT.
 "Falls in U.S. shares in the previous session and a lack of upward momentum after the index's weeks of near-uninterrupted gains are causing pressure," said Lee Sun-yeop, a market analyst at Goodmorning Shinhan Securities.
 News late on Friday that North Korea was cancelling all wage, rent and tax agreements with South Korea on the joint Kaesong factory park just north of their heavily armed border weighed on stocks in companies that have production units in the factory park, but had a limited impact on the broader market. [ID:nPEK58006]
 "Seoul market participants have become quite immune to North Korea-related news and tend not to react sensitively unless the development has a scale of impact that may affect South Korea's sovereign rating," Lee said.
 Shares in watchmaker Romanson (026040.KQ) and garment manufacturer Shinwon Corp (009270.KS), which operate in the park, fell 5.0 percent and 0.69 percent respectively.
 Shares in Hynix Semiconductor (000660.KS) outperformed the broader market, rising 1.13 percent, after the world's No.2 memory chip maker said on Monday it would sell packaging and testing equipment worth $305 million to a soon-to be formed back-end joint venture in China. [ID:nSEO238868]
 A weaker won currency KRW= boosted auto exporters, sending Hyundai Motor (005380.KS) 2.05 percent higher and Kia Motors (000270.KS) up 3.6 percent.
 But energy issues declined, weighed down by the weaker domestic currency and falls in crude prices CLc1 on demand worries.
 SK Energy (096770.KS) shed 3.2 percent and S-Oil (010950.KS) lost 2.15 percent.
 (Editing by Jonathan Hopfner)     

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