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Seoul: Shares fall as chipmakers lag; won supported by China trade data
[Seoul] South Korean shares slipped to 7-month lows on Monday morning, hit hard by the chip sector on concerns about the growth outlook, but the broader market pared its losses as investors bought into recently battered stocks.
The Korea Composite Stock Price Index (KOSPI) was down 0.7 per cent at 1,927.76 points as of 0230 GMT, pulling up from opening losses of 1.1 percent.
Analysts believe the market offers attractive value at current levels with many stocks considered oversold.
"The latest selling binge is overdone and mostly owing to the unwinding of short term plays from funds based out of Europe" said Woori Investment & Securities in a note to its clients.
"Quantitative easing prospects from the euro zone as well as cooling volatility in the currency market will likely apply the brakes on foreign selling," it said.
Offshore players have sold a net 1.3 trillion won (US$1.22 billion) worth of KOSPI shares over the last six sessions.
Chipmaker SK Hynix fell 2.6 per cent after a disappointing outlook from Microchip Technology suggested cloudy prospects for the sector.
The PHLX semiconductor index tumbled 6.9 per cent on Friday on the news, its largest daily percentage loss since January 2009, sending the Nasdaq Composite down 2.3 per cent.
STX shares plunged 15 per cent for the second straight day, the limit on daily price movement set by the bourse operator, after announcing a share write-down on Friday at a swap rate of 1 new issue per 9 outstanding.
Daum, a listing on the junior KOSDAQ, tumbled more than 5 per cent on worries of share dilution ahead of Tuesday's planned listing of 43 million new shares as part of its all-stock merger with messenger app Kakaotalk.
Defensive stocks such as consumer staples outperformed the broader market, as tobacco firm KT&G rallied 3.6 per cent.
The South Korean won edged up against the dollar on Monday morning, helped by an unexpected improvement in China's imports for September and a bigger-than-expected rise in exports.
China is South Korea's largest export destination.
The local currency was quoted at 1,067.9 to the dollar as of 0230 GMT, compared to Friday's close of 1,070.5.
December futures on three-year treasury bonds fell 3 basis points to trade at 107.72.