Seoul shares closed up on Monday, with Kookmin Bank rising after plans to transform it into a holding company were approved by shareholders, while Hyundai Motor gained on a weaker won. The Korea Composite Stock Price Index closed 0.35 percent higher at 1,502.11 points, cutting earlier near 1-percent gains on persistent foreign selling.
"In addition to external issues, domestic negatives such as concerns about continued sluggishness in the construction sector weighed on the index, cutting gains," said Jason Seo, a market analyst at LIG Investment & Securities. "Even the weaker won currency failed to lift IT exporters such as Samsung Electronics as their second half outlook remains grim, and foreign investors are seen continuing to offload local stocks," Seo added.
Foreigners sold South Korean shares for a fifth consecutive session, offloading 1.4 trillion won ($1.31 billion) since August 18. Shares in Hynix Semiconductor trimmed earlier gains to close down at 21,050 won from the session high of 21,450 won, after Lehman Brothers cut its target price on the world's No 2 memory chip maker citing slower margin recovery.
But Kookmin Bank closed up 2.5 percent to 57,300 won after it won approval from a shareholders' meeting on Monday to launch a holding company. Shinhan Financial Group gained 2.2 percent to 48,700 won. Key defensive issues such as telecommunications stocks gained as investors grow more conservative, sending SK Telecom, South Korea's top mobile phone operator, 2.85 percent higher to 198,500 won, and KTF, the country's No 2, up 2.05 percent to 27,400 won.
But shares in GS Holdings tumbled 4.32 percent to 29,900 won after a media report that GS Group was teaming up with STX Group to bid for Daewoo Shipbuilding & Marine Engineering. A group spokesman denied the report as "groundless." STX Corporation also lost 4.88 percent to 34,100 won.
However automakers gained, with investors increasingly convinced a selling spree since May had left the stocks oversold and a falling won had boosted prospects for the industry's exports.
Hyundai Motor climbed 3.61 percent to 71,800 won while Kia Motors rose 3.46 percent to 13,450 won. Samsung Engineering closed up 3.8 percent to 68,300 won after it said on Monday it had won a 439.2 billion won ($409.3 million) order for an LNG terminal project. Meanwhile airlines advanced after US crude fell sharply to settle at around $114 per barrel.
Korea Air Line rose 1.22 percent to 41,650 won and Asiana Airlines was up 1.34 percent to 4,550 won. Foreign investors sold a net 101 billion won worth of shares and local institutions bought a net 188 billion won of shares. Local retail investors offloaded a net 127 billion won. Decliners outnumbered advancers by 425 to 360, with 99 titles ending flat.
Trade volume stood at 194 million shares worth 2.8 trillion won, compared with 223 million shares worth 3.7 trillion won on Friday. The KOSPI 200 September futures index rose 0.80 points to 193.55 and the KOSPI 200 spot index gained 0.95 points to 192.99. The junior Kosdaq market went 0.19 percent higher to 484.37.