Sunday, October 18, 2009

South Korea Shares Fall, Lotte Down On China Times Deal

. Sunday, October 18, 2009

By stockOzone team

South Korea shares dropped 1.2 percent on Monday, with declines in U.S. stock markets on disappointing results reviving concerns about fourth-quarter earnings, although a retreat in the won lent support to LG Electronics (066570.KS).

Lotte Shopping (023530.KS), the country's No. 2 retailer by market value, fell 2.3 percent after its parent group confirmed an agreement to buy a controlling stake in Chinese supermarket operator Times (1832.HK) for an estimated $630 million to $650 million.

"Although the won turned lower, concerns about fourth-quarter earnings and the impact of the strengthened won appear to continue outweighing," said Kim Seong-bong, an analyst at Samsung Securities.

The Korea Composite Stock Price Index declined 1.24 percent to 1,619.96 points by 0152 GMT.

Both local institutions and foreign investors were net sellers of a combined 194 billion won worth of stocks, offsetting net buying from individual investors worth 198 billion won.

Shares in LG Electronics Inc, the maker of mobile phones and electronics goods, rose 2.7 percent to 115,000 won, with the won KRW= down a nearly 1 percent against the U.S. dollar.

Hyundai Motor Co (005380.KS) also eked out a 0.6 percent percent gain, bucking a recent downturn triggered by the won's advance.

Citigroup Global Markets reiterated a 'buy' on Hyundai Motor in a Friday note, saying the concern on the won's appreciation appeared overdone, and the recent share price weakness provided a better entry point for the stock.

Spirits maker Jinro Ltd (000080.KS) was trading at 42,650 won on its first trading day, above its IPO price of 41,000 won, which was set below its indicative range last month.

Disclosure: Author does not own any of the stocks discussed here.





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