South Korean shares closed a fraction lower on Monday, led by steel giant POSCO Co, but bargain-hunting by foreign investors in Hyundai Motor Co helped pare some early losses.
The market mostly shrugged off soaring oil prices, which touched a new high above $46 a barrel, on the view that local shares had bottomed out after hitting a 10-month closing low in early August.
"South Korean markets have been lagging behind US markets and we see no additional big impact from oil prices," said Keum Dae-ki, a fund manager at Dongwon Securities.
"The market has already factored in the possibility that crude oil prices might go up to $50 per barrel soon."
Crude oil for September delivery was trading at $46.77 a barrel after an explosion and fire at a large BP refinery in the United States fuelled more worries over possible supply disruptions.
The benchmark Korea Composite Stock Price Index (KOSPI) dipped 0.28 percent to finish at 773.85 points.
POSCO, the world's fourth-largest steel maker, fell 1.53 percent to 160,500 won, after local media reports quoted a foreign brokerage as saying the steel maker would find it difficult to raise domestic steel prices in the second half due to government moves to suppress inflation.
Bucking the trend, Hyundai Motor spiked up 3.4 percent at 48,600 won, ahead of the launch of a new model in September which is expected to revive local demand, and hopes for government steps to jump-start domestic consumption.
"Hyundai Motor looks cheap, compared with other global car makers," said Dongwon's Keum, adding he expected the KOSPI to run up to 800 points in the near term.
While some investors remaining cautious about chip giant Samsung Electronics Co Ltd, others chased undervalued IT stocks on belief their valuations had now fallen enough.
Shares in Samsung Electronics declined 1.83 percent to 430,000, while fixed-line and broadband operator KT Corp added 1.15 percent to 35,100.
Hana Bank, the country's fourth-largest lender, closed flat, recouping early losses triggered by concerns it would be roped into taking over an ailing state-run asset manager.
Trade volume decreased to 306 million shares versus 373 million shares on Friday.
The trading value tumbled to 1.5 trillion won, from 2.2 trillion won.
Gainers topped losers by 374 to 339.
The September KOSPI 200 futures index slipped 0.40 point to 99.15 and the underlying KOSPI 200 spot index was down 0.43 point to 99.72.
The over-the-counter Kosdaq rose 0.05 percent to 346.27 points.
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