Seoul shares recoup most losses to end down 0.6 pct | Economy-Finance

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Seoul shares recoup most losses to end down 0.6 pct

September 30th, 2008 | by admin |

 *KOSPI down 0.6 percent, but up from earlier 5.5 percent fall

 *Financials rocked by rejection of U.S. rescue plan

 *Exporters decline on real economy worries

 (Updates to close)

 SEOUL, Sept 30 (Reuters) - Seoul shares closed 0.57 percentlower on Tuesday, rallying from losses of up to 5.5 percent onbelief that despite U.S. congressional rejection of a financialbailout plan, lawmakers would eventually back a rescue deal.

 The Korea Composite Stock Price Index  closed down0.57 percent to 1,448.06 points, after touching a session low of1,376.72.

 The KOSPI index has lost 17.8 percent on the month.

 "Despite yesterday's bailout plan rejection, investors arestill expecting to see a rescue package of some sort, as themarkets simply cannot do without the rescue funding," said LeeKyung-su, a market analyst at Taurus Investment & Securities.

 "The reason Seoul shares are doing better than U.S. shares ispartly due to their latest steep falls, and also due to marketmeasures introduced by the (South Korean) government earliertoday," he added.

 The Financial Services Commission said it would banshort-selling of stocks the time being and allowed listed firmsto buy back more of their own shares.

 "President Bush is set to issue a statement tonight on therescue plan, and we will have to keep a close eye on its marketreception," said Hwang Geum-dan, a market analyst at SamsungSecurities.

 "Meanwhile, domestic economic data came in quite poorly,pointing to a slump in the real economy and worsening exportmarket conditions. Even if the rescue plan is eventuallyapproved, there are questions about whether it will be enough tohelp revive the U.S. economy, or to keep financial system incheck," Hwang added.

 South Korea's industrial output fell a seasonally adjusted2.2 percent in August from July, data showed on Tuesday, a deeperdecline than expected.[ID:nSEV000506]. And the current accounthit its biggest deficit on record last month.

 The weak data added to pressure on the won <KRW=> which endedlocal trade down 1.5 percent, the lowest since early 2003.

 Foreign investors were net sellers of 83 billion won ($68.43million) and institutions bought a net 126 billion won worth ofshares listed on the main index.

 Retail investors sold a net 76 billion won.

 Banking issues slid across the board, with Shinhan FinancialGroup (055550.KS: Quote, Profile, Research, Stock Buzz) ending 1.99 percent lower and Hana FinancialGroup (086790.KS: Quote, Profile, Research, Stock Buzz) losing 0.18 percent.

 Brokerages were also hit, with Woori Investment & Securities(005940.KS: Quote, Profile, Research, Stock Buzz) down 2.69 percent, and Hyundai Securities (003450.KS: Quote, Profile, Research, Stock Buzz)down 1.28 percent.

 Worries about the financial market crisis spreading into thereal economy weighed on exporters.

 Samsung Electronics (005930.KS: Quote, Profile, Research, Stock Buzz), the world's No.1 memory chipmaker, was down 0.92 percent, and LG Display (034220.KS: Quote, Profile, Research, Stock Buzz) dropped0.5 percent.

 However, shares in Kia Motors Corp (000270.KS: Quote, Profile, Research, Stock Buzz), the country'sNo.2 carmaker, bucked the market downturn to rise 2.81 percent,touching a 52-week high, on a weaker South Korean Won and a rosysales outlook.

 "The recent boom in small car sales, coupled with the weakerwon currency, will help Kia Motors," Yong Dae-in, an analyst atHanwha Securities, said in a report. ($1=1212.8 Won)

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