Seoul shares closed flat on Monday, struggling near a seven-week low, as gains in LG Display and other tech stocks were offset by losses in automakers such as Kia Motors. The Korea Composite Stock Price Index (KOSPI) ended up a mere 0.09 point at 1,891.52, after closing on Friday at its lowest level since early September on concerns about the impact on exporters from the won's strength.
"The exporters are split, as good earnings push up IT and electronics stocks while Hyundai and Kia are suffering after Kia's poor results, which makes them even more sensitive to concerns about the strong currency," said Oh Seung-hoon, an analyst at Daishin Securities. LG Display soared 7.6 percent after the flat-panel maker reported its first quarterly profit in two years after market close on Friday, driven by sales of its screens used in Apple Inc's iPad and iPhone.
But Kia Motors lost 4 percent, extending losses made on Friday when it posted a smaller-than-expected profit margin for the third quarter, hit by labour strikes. Hyundai Motor dropped 3.1 percent. Declining stocks beat gainers by 567 to 263.
The KOSPI briefly turned negative in the afternoon, falling near the 1,880-mark as foreign selling overtook buying by local institutions. Just before the close, local institutions managed to support the market through their buying of 242 billion won ($220 million) worth of KOSPI shares. "The (KOSPI's) price-to-earnings ratio is at 8 and price-to-book value is 1.05, similar to levels in May and July when markets were panicking," said Kim Ji-hyung, an analyst at Hanyang Securities, referring to when the market was also below the 1,900-mark, amid hit by worries about Europe's debt crisis.
Kim said that this time, investor sentiment was being undermined by worries about a "fiscal cliff" of government spending cuts and tax increases that may occur in the United States next year. The KOSPI 200 benchmark of core stocks closed up 0.2 percent, while the junior KOSDAQ fell 2.1 percent.