Seoul shares fell the most in more than two months on Tuesday, hit by renewed worries about slowing global growth and underperforming regional peers as blue chip automakers succumbed to a selling spree. Analysts said that weak United States manufacturing data added to dampened sentiment after data showing global manufacturing activity expanded at its weakest rate in July in two years.
"I think the US economy hit a soft patch that will likely be temporary, despite some fears of a double dip," said June Park, a strategist at Meritz Securities. The Korea Composite Stock Price Index ended the day 2.35 percent lower to 2,121.27 points, led by Hyundai Motor, which tumbled 4.9 percent. Analysts said sharp falls in auto heavyweights caused the KOSPI to underperform the MSCI Asia ex-Japan index, which retreated 1.84 percent as of 0733 GMT.
Institutional investors turned net sellers after a 13-session buying spree, offloading a net 80.6 billion won ($76.7 million) worth of stocks. Foreign investors also sold a net 365.6 billion won worth of stocks. Hyundai Motor's affiliate Kia Motors slid 4 percent, reversing the previous session's solid gains following strong sales results. Other blue chip shares lost ground, with the country's No 1 stock by market cap Samsung Electronics retreating 2.1 percent.
Imarketkorea Inc plunged by the intraday limit of 15 percent after its parent Samsung Group announced it would sell a combined $528 million worth stake in the firm. The Seoul Economic Daily reported that Hynix shareholders-turned-creditors are considering limiting the proportion of foreign investment to 25 percent of the auctioned stake as the government wants to prevent technology leaks, though lead creditor Korea Exchange Bank later denied the report. STX Corp gained 2.6 percent and STX Offshore & Shipbuilding surged 4.7 percent. Decliners outnumbered gainers by 687 to 170.