Seoul shares trade flat as caution rules

SEOUL: Seoul shares moved in and out of positive territory on Wednesday as caution pervaded, with investors waiting to see if the US Federal Reserve would offer more economic stimulus and for signs of progress in Europe's debt crisis.

The Korea Composite Stock Price Index (KOSPI) was flat at 1,838.01 points as of 0201 GMT.

"The market's interest is on the US Fed and when and how European leaders will take actions to prevent a debacle in the euro zone," said Han Beom-ho, a market analyst at Shinhan Investment Corp.

"There is more optimism than despair, which is good," Han said, adding however that the global economic outlook remained cloudy and market players would look for longer-term direction in earnings and policy shifts.

Foreign investors were sellers of a net 11.2 billion Korean won ($9.8 million) worth of stocks, poised to offload shares for a second straight session.

Shares in Hynix Semiconductor outperformed, rising 2 percent after its lead shareholder said new bidders would be allowed to join the $2.8 billion sale of a stake in the chipmaker.

But shares in LG Display shed 2.1 percent after sharp gains in the previous session and a negative outlook from Nomura.

Nomura downgraded its rating on the world's No.2 flat panel maker to "neutral" from "buy" and slashed its target price by 23 percent to 24,000 won.

Retailers continued to struggle as economic uncertainties fueled worries about consumer sentiment.

Shares in Lotte Shopping , the country's No.1 retailer, shed 1.8 percent and Shinsegae lost 2.6 percent.

Shipping companies were helped by a 1.8 percent rise in the Baltic Dry Index , which tracks the cost of shipping key commodities.

Shares in STX Pan Ocean were up 2.5 percent and Hanjin Shipping advanced 3.7 percent.

Copyright Reuters, 2011