Seoul shares fall

Seoul shares fell on Tuesday, weighed down by heavy futures selling and news that North Korea was planning another missile launch, while Hyundai Heavy tumbled on rumours of its interest in Hynix. The Korea Composite Stock Price Index (KOSPI) finished down 2.06 percent to 1,372.04 points.
"Heavy futures selling by foreign investors are pressuring index. There are jitters on uncertainties ahead of key economic data from the United States and as final decision on General Motors is awaited," said Bae Sung-young, a market analyst at Hyundai Securities.
Banks led declines, with KB Financial Group, the holding company of Kookmin Bank, South Korea's largest commercial lender, losing 4.22 percent, while Hana Financial Group fell 5.73 percent. News that North Korea was reportedly ready to test-fire more short-range missiles further pressured market sentiment.
"The kinds of actions taken by North Korea do not differ so much from the established patterns of behaviour. And while sentiment was certainly weighed down by growing North Korea tension, we think its impact would be relatively short-lived," said So Jang-ho, a market analyst at Samsung Securities.
Meanwhile shares in Hyundai Heavy Industries retreated amid market speculation that the South Korean shipbuilder is interested in buying Hynix Semiconductor. A Hyundai Heavy Industries spokesman declined to comment, while a local media report cited the company official as denying the rumour. Shares in Hyundai Heavy dropped 4.22 percent and Hynix fell 5.14 percent.
Ilyang Pharmaceutical Co Ltd rose 6.09 percent after the company announced on Tuesday it had signed a memorandum of understanding with a division of German pharmaceutical firm Merck to distribute Ilyang's anti-ulcer product in South Asia.
"The final contract will be completed within a few months," a Ilyang spokesman said. Meanwhile, Ssangyong Corp rallied after GS Holdings, the holding company of crude refiner GS Caltex, said in filings to the Korea Exchange that it would buy a 70 percent stake in the firm worth a revised 120 billion won ($96.58 million). Ssangyong spiked 15 percent, but GS Holdings fell 3.7 percent.
But shares in companies with interests in North Korea declined, hurt by reports the North was planning yet another short-range missile launch. Romanson, a watchmaker that has a production unit in the Kaesong industrial park in the North, tumbled 9.52 percent, and Ehwa Technologies Information Co Ltd, a power supply equipment maker that is a strong potential supplier for much-hoped-for North Korea infrastructure projects, fell 14.0 percent.
Elsewhere, POSCO finished 1.77 percent lower after the world's No 4 steelmaker said late on Monday it had lowered prices of its stainless steel by up to 19 percent, its third such move since August last year, reflecting weak market conditions. Foreign investors bought a net 157.8 billion won worth of shares and institutions sold a net 460.6 billion won worth.
Retail investors purchased a net 305.4 billion won. Decliners led advancers 646 to 176, with 57 unchanged. Trading volume stood at 648 million shares worth 7.8 trillion won compared with 817.8 million shares worth 8.5 trillion won on Monday. The KOSPI 200 June futures index ended 3.90 points lower at 174.40, and the KOSPI 200 spot index fell 3.80 points to 174.77. The junior Kosdaq market declined 1.02 percent to end at 536.54 points.