Seoul shares fall

Seoul shares fell on Monday, weighed down by news North Korea had sentenced two US journalists to 12 years hard labour, but Korea Exchange Bank jumped on the back of brewing acquisition hopes. The Korea Composite Stock Price Index (KOSPI) finished down 0.10 percent at 1,393.30 points.
"The news about the US journalists weighed on sentiment, as it again heightened South Korea's geopolitical risks. Although this will probably be short-lived, there still are concerns the United States may take stringent measures in response," said Lee Yun, a market analyst at Woori Investment & Securities.
North Korea, facing UN sanctions for last month's nuclear test, on Monday raised the stakes in its growing confrontation with Washington by jailing two US journalists to 12 years hard labour for a "grave crime." "Foreign investors trimmed their buying in afternoon trading, and combined with institutional selling, the index fell unnder the pressure," Lee added. Foreign investors still ended buyers of a net 43.6 billion won worth of shares, purchasing for a second consecutive session. Losses were led by automakers following their latest rises.
Hyundai Motor, which had gained 82.5 percent on the year as of Friday's closing, fell 4.44 percent, and Kia Motors lost 2.94 percent. But Korea Exchange Bank jumped 7 percent, hitting its highest close in eight months, on continued merger and acquisition hopes.
"So far, KB Financial has most frequently been named as the most likely buyer, and I think this is possible if KB Financial succeeds in raising enough capital," said Lee Hyuk-jae, an analyst at IBK Securities.
KB Financial Group, the parent group of South Korea's largest commercial lender Kookmin Bank, ended down 2.67 percent after news on Friday it was seeking to raise up to $3 billion through a share sale by around the third quarter.
Hite Holdings, the holding firm for South Korea's top brewer Hite Brewery, finished up 4.59 percent after news on Monday that spirit maker Jinro Ltd, in which it holds a major stake, is looking to raise about 500 billion won ($401 million) via a public offering on the domestic bourse by around end-September at the earliest.
Hite Holdings controls 49.74 percent of Jinro, according to a Korea Exchange filing in mid-May this year. "Jinro's attempts at re-listing has been expected for some time...but the reports indicate that share pricing negotiations are proceeding smoothly, and this boosted sentiment towards Hite Holdings," said Park Jong-rok, an analyst at Hanwha Securities.
Elsewhere shares in Samsung Engineering climbed 4.46 percent to 86,700 won helped by a positive brokerage note. Merrill Lynch upgraded its rating on Samsung Engineering to "buy" from "underperform" and raised its target price by 83 percent to 110,000 won, saying the builder wcs expected to post faster-than-expected new order growth as crude and raw material prices recover. Institutions sold a net 92.1 billion won worth of shares and retail investors bought a net 87 billion won.
Decliners led advancers 424 to 375, with 83 unchanged. Trading volume stood at 508 million shares worth 5.33 trillion won, compared with 495 million shares worth 5.8 trillion won on Friday. The KOSPI 200 June futures index ended 0.20 points higher at 177.30, and the KOSPI 200 spot index fell 0.10 points to 177.67. The junior Kosdaq market ended flat at 529.11 points.