Seoul stocks briefly touched a one-week high on Monday, led by recently beaten-down shares such as POSCO, but they lost steam in late trade after disappointing industrial production data. Foreign investors turned buyers after 13 straight sessions of net sales, with a net purchase of 139.8 billion won ($147.5 million) worth of stocks.
POSCO Co Ltd was one of the best blue chip performer as investors bet that a tie-up between Arcelor and Russia's Severstal would spur a global industry consolidation that would boost pricing power for steel makers.
Hyundai Motor Co put on 2.25 percent to 77,200 won after the chairman of the country's top auto maker requested bail after being indicted on charges of embezzling company funds.
The benchmark Korea Composite Stock Price Index (KOSPI) hit a high of 1,340.33 - a level last seen on May 22 - before settling at 1,329.22, up 0.51 percent. The market had rallied 2.06 percent on Friday. Data released late in the trading session showed the industrial output index fell 1.5 percent in April from March, fuelling worries about the economy.
"The output numbers add to concerns over the economy's slowdown," said Park Sang-hyun, an economist at CJ Investment and Securities. Still, a positive lead from Wall Street on Friday and US economic data that did not add to inflation concerns helped the local market end higher.
Since setting a record high of 1,464.70 on May 11, Seoul's benchmark index had fallen sharply, in line with other emerging markets, on concerns about US inflation, higher interest rates, a pullback in commodity prices and a slowdown in the world's biggest economy.
The KOSPI is down about 9 percent from its peak. It had hit a near six-month closing low of 1,295.76 last Thursday. Underscoring the defensive appetite investors have adopted, traditional safe havens such as telecom stocks were mostly higher. SK Telecom put on 3.21 percent to 225,000 won and KTF Co Ltd added 3.24 percent to 31,900 won.
POSCO climbed 2.24 percent to 250,500 won, while Hyundai Steel Co put on 2.31 percent to 35,500 won. Banks turned mixed after a strong start, with top lender Kookmin Bank adding 1.15 percent to 79,200 won, but Woori Financial Group pared early gains to end down 0.26 percent at 19,150 won.
Market heavyweight Samsung Electronics edged up 0.32 percent 622,000 won and Korea Zinc Co Ltd jumped 6.06 percent to 78,800 won as base metal prices stabilised after a recent shakeout.
Some brokerages such as Samsung Securities Co fell after a report on Friday predicted slower earnings momentum for the sector this fiscal year.
A statement from state-run Korea Deposit Insurance Corp said combined net profit for brokerages rose more than 10-fold in fiscal 2005 from a year ago.
Samsung Securities lost 2.06 percent to 52,200 won, while Hyundai Securities Co shed 0.40 percent to 12,300 won.
Trade volume reached 222.9 million shares worth 2.6 trillion won, down from Friday's 231.4 million shares worth 3.4 trillion won. Decliners lagged gainers by 338 to 386 with 92 titles ending flat.
Retail investors sold a net of 54.4 billion won, while institutional investors sold a net of 123.5 billion won.
The June KOSPI 200 futures index gained 0.35 percent to 172.50 and the underlying KOSPI 200 spot index put on 0.47 percent to 172.64.
South Korea's junior and tech heavy Kosdaq market added 0.69 percent to finish at 638.27.
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