Seoul shares end 0.44 pct lower on machinery falls

By Kim Soo-yeon
SEOUL, June 29 (Yonhap) -- South Korean stocks closed 0.44 percent lower Monday
as institutional investors dumped machinery and builders, analysts said. The
local currency fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) shed 6.08 points to
1,388.45. Volume was moderate at 416.8 million shares worth 3.95 trillion won
(US$3.07 billion), with losers outpacing gainers 513 to 283.
"Without clear leads, the Seoul bourse traded in a tight range throughout the
session. For the time being, the KOSPI will likely remain in a narrow range until
it gets momentum, backed by the corporate earnings reports," said Kwak Joong-bo,
an analyst at Hana Daetoo Securities Co.
The key stock index started stronger, but later it dipped to negative territory
as institutional investors turned net sellers of local stocks.
The second-quarter earnings season will kick off in South Korea in mid-July.
Analysts said tech and retail stocks have gained ground as their bottome lines
are widely expected to be strong.
Ssangyong Motor, the country's smallest carmaker, declined by the daily limit of
15 percent to 1,685 won as its unionists vowed to fight to protect the jobs of
fellow workers, after violent clashes broke out with management.
After rising as much as 14.8 percent at one point, shares of Daewoo Engineering &
Construction closed 7 percent higher at 13,750 won as Kumho Asiana Group said
Sunday that it will sell the builder in an effort to avert a worsening liquidity
problem.
Kumho Asiana Group bought a 72.11-percent stake in the construction firm in 2006
for 6.42 trillion won, 3.5 trillion won of which was funded by banks and other
financial firms. Kumho offered a put-back option under which it promised the
financial providers it would buy back the builder's shares by the end of this
year if the stock price fell below 32,000 won. Deepening financial turmoil has
sent its shares sharply lower, amplifying concerns about its liquidity.
But shares of Kumho Asiana Group subsidiaries closed lower despite hopes that a
possible sale of Daewoo Engineering might abate its liquidity squeeze. Kumho
Industrial Co. tumbled the daily limit of 15 percent to 13,700 won and No. 2
carrier Asiana Airlines shed 0.14 percent to 3,695 won.
After volatile trading, the local currency ended at 1,285.8 won against the
greenback, down 1.5 won from Friday's close, as the Seoul bourse lost ground,
dealers said.
sooyeon@yna.co.kr
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