SEOUL: Seoul shares fell on Wednesday amid doubts European leaders can agree on a plan to end the euro zone debt crisis, with weak US data weighing on sentiment, but firm gains in LG Electronics ahead of its results announcement lent support.
"Overnight developments in Europe came as an alarming sign that the EU summit may not go as smoothly as hoped, and this uncertainty is weighing on stocks," said Kim Seung-han, a market analyst at HI Investment & Securities.
A flare-up over the European Central Bank and political turmoil in Italy kept the euro zone on edge on Tuesday on the eve of a summit meant to confront the currency block's worsening sovereign debt crisis.
Data showing that US consumer confidence unexpectedly dropped to its lowest level in two-and-a-half years in October, suggesting the US consumer is still struggling, may hurt the market further.
"Resistance at 1,900 points will last throughout today," Kim added.
The Korea Composite Stock Price Index (KOSPI) was down 0.93 percent at 1,871.09 points as of 0130 GMT.
Shares in LG Electronics rose 2.4 percent ahead of its third-quarter results scheduled later in the day.
The world's third-biggest handset maker is expected to post a disappointing quarterly profit on widened handset losses, as it struggles in the smartphone battle with the likes of Apple, Samsung and HTC.
"Third quarter numbers will come out weak, but positive expectations are brewing for fourth quarter and next year in particular," said Park Sang-hyun, an analyst at KTB Securities.
"Its smartphone businesses, which have struggled, is expected to pick up, with the debut of Optimus LTE," Park added.
Airlines and tour issues weighed as the South Korean won edged down against the dollar early on Wednesday. A weaker won makes the cost of importing jet fuel more costly, while it dampens appetite for overseas tourism.
Shares in Korean Airline fell 1.2 percent and Asiana Airlines lost 1.9 percent.
Hana Tour , an on-and-offline tour agency, slid 1.4 percent.
Elsewhere, shares in companies with perceived connections to the candidates for mayor of Korea's capital and largest city Seoul swung on the day of the election on what analysts said were vague and unfounded hopes they may benefit from the outcome.
Hanchang , an IT equipment manufacturer, jumped 4.1 percent. Hanchang's CEO went to the same college and studied the same major as Na Kyung-won, the candidate backed by the ruling Grand National Party.
Shares in Ahnlab , a computer network security firm, were flat after dropping more than 10 percent earlier. Ahnlab was founded by Ahn Cheol-soo, who is backing opposition candidate Park Won-soon. Opinion polls last month showed Ahn as the country's preferred choice for president.
"The Seoul mayoral election is a good indicator of where the presidential election is headed next year. Investors are making bets on certain candidates and their related political clout," said Lee Sun-yeb, a market analyst at Shinhan Investment Corp.
"But these bets are based only on expectations and have nothing to do with the companies' operations or performance."
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