Seoul: Shares edge lower as gains from China PMI fade; won retreats

[SEOUL] South Korean shares drifted lower on Thursday morning after a choppy session, as initial gains on the back of a Chinese factory activity survey quickly faded.

The Korea Composite Stock Price Index (KOSPI) was down 0.15 per cent at 1,934.08 points as of 0200 GMT.

A private survey released on Thursday showed China's manufacturing sector grew a shade faster in October, though the modest expansion likely won't dispel concerns about the cooling Chinese economy.

"China is likely to pursue aggressive policy measures to engineer a soft landing, viewing the third-quarter slump as the Maginot Line and trying to minimise the downside risk to fourth-quarter growth," said Sung Yeon-ju, an analyst at Daishin Securities, referring to a line of defence during World War Two.

Most of the notable share movements on the main bourse were guided by earnings, with the market entering a busy period of third-quarter guidance releases.

Shares in LG Display soared more than 4 per cent after it announced third-quarter earnings guidance on Wednesday, which indicated the highest quarterly profits in 2 years for the July-September period.

"LG Display has dispelled worries that low-margin conditions due to seasonal factors would have an adverse effect on their profit forecasts next year," said Julius Kim, an analyst at Woori Investment & Securities.

"Demand from Apple and increased shipment of large-screen televisions will provide support in the first half of 2015, despite being the traditional off-season," he said.

Amore Pacific shares climbed 3.5 per cent before pulling back as brokerages tipped the cosmetics-maker's third-quarter earnings to beat market forecasts, citing growing demand from China and robust duty-free sales.

LG Household & Healthcare Inc jumped more than 11 per cent after its third-quarter guidance on Thursday morning before the opening bell, which indicated a 3 per cent increase in profits compared with the year before. Analysts say they see the massive increase in demand from China sustaining into 2015.

The South Korean won won fell on Thursday, with the dollar supported by data showing a modest rebound in US inflation, prompting market players to push out the possibilities of a delayed rate hike by the US Federal Reserve.

The local currency was quoted at 1,055.6 to the dollar as of 0200 GMT, compared with Wednesday's session close of 1,051.4.

December futures on three-year treasury bonds rose 5 basis points to trade at 107.84.

REUTERS