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Seoul shares steady before Fed meeting, automakers up
January 28, 2014 / 2:50 AM / 4 years ago

Seoul shares steady before Fed meeting, automakers up

* LG units fall on weak earnings, Apple earnings forecast

* Stabilising won lends support for automakers

* Hyundai Motor & affiliates rally, support the index

SEOUL, Jan 28 (Reuters) - Seoul shares steadied early on Tuesday after sharp declines the previous three sessions, with investors staying cautious ahead of expected stimulus reduction by the U.S. Federal Reserve this week.

The Korea Composite Stock Price Index (KOSPI) was up 0.05 percent at 1,911.21 points as of 0223 GMT. The KOSPI shed more than 3 percent in the past three sessions.

“Investors are on hold before the Fed meeting as it’s the key for a near-term rebound for the market,” said Mirae Asset Securities analyst Chung Seung-jae. “If the Fed’s stimulus curve is in line with market expectations, it can reverse the foreign outflow trend and allow the market to lure offshore investors with its low valuations.”

Thomson Reuters data shows the KOSPI is carrying a price-to-book (PBR) ratio of 1.21.

The Fed is expected to cut an additional $10 billion in its asset purchasing stimulus following a two-day policy meeting that ends on Wednesday.

Offshore investors were poised to extend their net selling streak to a fourth session by offloading a net 122.1 billion won ($112.7 million) worth of KOSPI shares near mid-session.

Key suppliers of Apple Inc’s smartphones and tablets dropped after Apple offered a weaker-than-expected forecast for this quarter and its shares plummeted 8 percent on Monday.

LG Display Co Ltd and LG Innotek Co Ltd fell 4.4 percent and 3.5 percent, respectively.

Lacklustre earnings pushed its affiliates LG Electronics Inc and LG International Corp into the red, dipping 3.6 percent and 2.8 percent, respectively.

Meanwhile, a stabilising won currency against the dollar and yen supported automakers Hyundai Motor Co and Kia Motors Corp, which gained 2.5 percent and 2.2 percent, respectively.

Affiliate and autoparts maker Hyundai Mobis Co Ltd rose 3.6 percent after announcing better-than-expected October-December quarter earnings on Monday and a plan to build three additional production plants by September.

Mobile carrier KT Corp rose 4.9 percent despite a soft earnings report early on Tuesday, as the installation of a new company chairman on Monday raised hopes of a quick turnaround.

Decliners outnumbered advancers 430 to 346.

The KOSPI 200 benchmark of core stocks was up 0.2 percent, while the tech-heavy junior KOSDAQ edged 0.2 percent lower.

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