Seoul shares off year-high

Seoul shares retreated from their yearly high on Monday, with Hankook Tire hit hard after a US decision to slap steep duties on tire imports from China sparked concerns about competition in export markets. Technology stocks, including Samsung Electronics and LG Electronics, also led the market lower, with market indicators signalling Seoul shares were in the overbought territory last week following a near 6-month upward streak.
The Korea Composite Stock Price Index (KOSPI) finished down 1.02 percent at 1,634.91 points, reversing earlier gains which brought it close to this year's peak of 1,653.77 hit on Friday. Local institutions offloaded large caps such as SK Energy, after crude oil prices dropped and on market talk the refiner might launch a rights offering which the company said was unfounded.
"US market falls over the weekend, despite improved consumer sentiment data, fuelled concerns about the current valuations in our stock markets," said Choi Seong-lak, a market analyst at SK Securities. Seoul shares have gained 45 percent on the year to data, compared with a 53 percent rise in the MSCI index of Asia-Pacific stocks outside Japan.
Hankook Tire Co Ltd, the country's top tyre maker, which operates factories in China, fell 8.8 percent to 20,200 won. The White House said on Saturday that imposing the new additional duties from later this month was meant to enforce trade rules.
Analysts say the decision might crimp sales of Hankook's Chinese plants and led Chinese tyre makers to dump their products in non-US markets. Samsung Electronics, the world's No 1 memory chip maker, lost 3.66 percent and LG Electronics, the world's No 3 handset maker fell 4.28 percent.
SK Energy, the country's top refiner, decreased 5.13 percent to 111,000 won. "Following their steep gains on the year, technology issues were ripe for a technical correction, and the latest strength in the won and retreats seen in regional peers, prompted falls today," said Seo Do-won, an analyst at Hanwha Securities.
"But the fact that their earnings outlook remains bullish does not change," Seo added. Among big losers, Hanjin Shipping shed 5.3 percent on a newspaper report that the downturn-hit company was seeking to sell assets to raise funds. But the company told the Korea Exchange in a disclosure on Monday that nothing had been decided on the reported sales. Bucking the trend, KOGAS rose 2.69 percent after the world's biggest corporate buyer of liquefied natural gas (LNG) posted growth in August sales.