Seoul: Shares flat as Greek election results dampen mood; won firmer

[SEOUL] South Korean shares were nearly flat on Monday after victory by the anti-austerity Syriza party in Greece's elections made investors wary of problems ahead in Europe.

The Korea Composite Stock Price Index (KOSPI) ticked down 0.01 per cent at 1,935.88 points as of 0238 GMT.

The main bourse rallied 2.5 per cent last week, reaching a one-month high on Friday, buoyed by the European Central Bank's massive bond-buying stimulus programme.

Greece's radical left-wing leader Alexis Tsipras will probably be sworn in as prime minister of the first government in the euro zone that is openly opposed to austerity conditions imposed as part of a bailout programme.

"From a market perspective, Greece has avoided the worst case scenario of a split vote where no majority could be formed, which would call for new elections," said Lee Eun-taek, an analyst at SK Securities.

"Still, creditors are not happy with Syriza's pledge to reverse cutbacks and markets will be facing a lot of uncertainty until the end of February when Greece's current bailout programme expires," he added.

Shares in Kia Motors extended losses to touch a 52-week low, tumbling 4.8 per cent after the automaker reported lacklustre fourth-quarter guidance on Friday that fell significantly short of analyst forecasts.

LG Chem shares slid 1 per cent ahead of its earnings estimate for October-December, with several brokerages forecasting a sharp decline in profits due to a recent plunge in oil prices.

Offshore investors were net sellers of 63.4 billion won (US$58.7 million) of KOSPI shares, leaving them poised to end a four-day buying streak.

The South Korean won firmed against the dollar on Monday, tracking gains in the yen as worries over Greece triggered a sharp rally in the safe-haven Japanese currency.

The local currency was trading at 1,079.8 to the dollar as of 0238 GMT, compared to 1,084.1 quoted at the end of Friday's session.

March futures on three-year treasury bonds gained 10 basis points to trade at 108.64.

REUTERS