May 16, 2014 / 3:02 AM / 4 years ago

Seoul stocks down on profit-taking, still up for week; won eases

* KOSPI eyes first weekly rise this month
    * Won treads water amid intervention caution

    SEOUL, May 16 (Reuters) - Seoul shares nudged lower on
Friday morning as soft global economic indicators prompted
profit-taking from a recent five-day rally, but extended foreign
capital inflows limited losses.
    The Korea Composite Stock Price Index (KOSPI) was
down 0.6 percent at 1,998.72 points as of 0236 GMT. The index
was up 2.1 percent for the week and headed for its strongest
weekly rise since late March.  
    "The weak euro zone growth data has dented risk appetites,
as a slow recovery in Europe poses concerns about export
prospects of China and the U.S., which translates to a grim
global economic growth outlook," said IM Investment & Securities
analyst Kang Hyun-gee.
    Reports on Thursday showed the euro zone economy grew much
less than expected at the start of the year and inflation
remained in the 'danger zone' below 1 percent, while the U.S.
industrial output in April had the biggest monthly drop since
August 2012.  
    Kang added that investors will expect accommodative policy
action by the European Central Bank at its June meeting. 
    Among heavyweight stocks slipping in Seoul were Hyundai
Motor Co, down 2.7 percent, and LG Corp 
off 1.4 percent. 
    Foreign investors positioned became net buyers near
mid-session, picking up 169 billion won ($164.83 million)  of
KOSPI shares. They have been net buyers the past three days. 
    The won eased as participants were wary of the strong
stance of local foreign authorities to defend the currency from
appreciating beyond the 1,020 level.
    The local currency was quoted at 1,026.4 against
the dollar as of 0236 GMT, down 0.1 percent from Thursday's
onshore close at 1,025.3.
    "Upside pressure remains heavy on capital inflows and dollar
selling by exporters, but the won struggles to rebound on
buffered resistance due to intervention caution," one currency
dealer said. 
    So far this week, the won was down 0.2 percent, and appeared
headed for its first weekly loss this month.

                       0235 GMT    Prev close
 Dollar/won            1,026.4       1,025.3
 Yen/won           10.1134/064       10.0876
 *KTB futures           106.01        106.01
 KOSPI                1,998.72      2,010.20
 * Front-month futures on three-year treasury bonds
($1 = 1025.3000 Korean Won)

 (Reporting by Jungmin Jang; Additional reporting by Yena Park;
Editing by Richard Borsuk)

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