Seoul shares closed lower on Monday after a rebound in oil prices sent exporters lower, while Daewoo Shipbuilding tumbled after Doosan Group said it would not bid for the South Korean shipbuilder. The Korea Composite Stock Price Index closed 0.28 percent lower at 1,567.71 points, falling after a firm start.
"Oil's rebound and lack of signs that market fundamentals are improving have dampened sentiment," said Park So-yeon, a market analyst at Korea Investment & Securities. The US crude was trading above $115 per barrel as of 0605 GMT, bouncing after falling last week to its lowest since early May.
"The index will have a hard time climbing back to 1,600 as caution about economies pervade the markets," Park added. Shares in Daewoo Shipbuilding and Marine Engineering tumbled 4.81 percent to 38,550 won after Doosan Group said it has dropped its bid interest in the shipbuilder.
However Doosan Group units rallied after the announcement, sending Doosan Heavy Industries 2.34 percent higher to 100,500 won and Doosan Infracore closed up 3.13 percent to 26,400 won. Doosan Construction gained 7.53 percent to 7,850 won. Shares in POSCO fell after Doosan's announcement and after a source close to the situation told Reuters that the world's No 4 steelmaker was looking for partners to bid for Daewoo bid, raising worries about a potential financing burden.
POSCO lost 1.35 percent to 474,500 won. Shares in units of Hanwha Group, an energy-focused South Korean conglomerate that is also interested in bidding for Daewoo, also fell across the board. Hanwha Chemical Corp ended 7.17 percent lower at 11,000 won and Hanwha Corp lost 3.05 percent to 39,750 won. Meanwhile higher oil sent exporters lower, sending Hyundai Motor 0.96 percent lower to 71,900 won and LG Electronics 3.7 percent lower at 117,000 won. Kia Motors lost 5.56 percent to 12,750 won.
Shares in STX Shipbuilding rose 0.44 percent to 23,050 won after shipbuilding-to-energy group parent STX said on Monday it had secured full management rights in No 1 European shipmaker Aker Yards, more than doubling its stake in the firm to 88 percent through a $635.5 million tender offer. However shares in Dongwon group subsidiaries fell after news last week that US antitrust authorities approved Del Monte Food Co's $363 million sale of its tuna brand StarKist to South Korean food group Dongwon.
Dongwon Industries Co Ltd lost 10.57 percent to 110,000 won and processed food maker Dongwon F&B Co Ltd declined 2.29 percent to 42,700 won. Shares in Kookmin, South Korea's largest lender, continued their rally on last week's share buyback plans, helped also by a series of announcements by its major shareholders of their decision to support the bank's holding company plans. Kookmin ended 1.67 percent higher at 60,800 won.
Construction issues rallied after their latest extended losses, with Hyundai Engineering & Construction rising 0.75 percent to 67,300 won and Daewoo Engineering & Construction up 8.46 percent to 14,100 won. Foreign investors bought 10.4 billion worth of shares and local institutions offloaded a net 110 billion won of shares on the main board. Local retail investors bought a net 77 billion won.
Decliners outnumbered advancers by 505 to 313, with 64 titles ending flat. Trade volume stood at 255 million shares worth 3.4 trillion won, compared with 243 million shares worth 3.6 trillion won on Thursday. Seoul stock market was closed on Friday for a public holiday. The KOSPI 200 September futures index lost 1.70 points to 202.30 and the KOSPI 200 spot index shed 0.53 points to 200.97. The junior Kosdaq market went down 1.1 percent to 517.04.