South Korea shares up

Seoul shares closed marginally higher on Monday as investors took a breather following hefty gains in the previous session, awaiting a slew of economic data from China later in the week to provide further market direction. The Korea Composite Stock Price Index (KOSPI) drifted up 0.05 percent to close at 1,886.80 points, edging up from a seven-week closing high on Monday.
"The market feels much more at ease... whereas before sharp gains were usually followed by correction, now instead of a sell-off, we're seeing a healthy rotation into smaller-cap shares," said Lee Jae-man, an analyst at Tong Yang Securities. China is due to release a slew of July data including inflation, industrial production, retail sales and inflation on Thursday, which investors will comb through to gauge the health of the world's second-largest economy.
Growth-sensitive shares outperformed, with Hyundai Engineering & Construction up 2.1 percent, while Daewoo Engineering & Construction rose 2.9 percent. Shares in Korea Aerospace Industries soared 6.1 percent after the firm posted a 21.2 percent gain in second-quarter profit compared to a year before, and on mounting expectations of a $1.05 billion stake sale in the aircraft maker by its majority stakeholder Korea Finance Corp, drawing interest from Korean Air.
Defensives underperformed on improved risk appetite, with telecoms lagging as SK Telecom fell 2.1 percent while KT Corp shed 1.9 percent. Shares in Halla Climate Control Corp plunged nearly 13.2 percent after South Korean auto-parts maker Mando announced a preliminary deal to secure purchasing rights of Halla shares held by the National Pension Service (NPS).
South Korea's central bank is expected to keep interest rates steady at a policy meeting on Thursday after a surprise cut in July, though it is likely to lower rates at least once more this year if the economy continues to show weakness. Government data showed sales at top South Korean department and discount stores at their worst showing in more than five years, the latest sign of slowing in Asia's fourth largest economy.