Seoul shares slip

Seoul shares slipped on Friday, weighed down by automakers and airlines including Hyundai Motor and Korean Air Lines Co Ltd, with profit-taking also taking place with the index near a 38-month high. The Korea Composite Stock Price Index was down 0.29 percent at 2,031.63 points as of 0253 GMT, but still trading near the 38-month high of 2,045.39 points.
"The index at the current level is ripe for profit-taking. Even technically, corrections are due," Woori Investment & Securities analyst Lawrence Kim. The main index's relative strength index read 72, above the overbought mark of 70. The index's 20-day moving average was about 1,985 points, down about 3 percent from the current level. Automakers weighed, with Hyundai Motor Co, the third-largest stock on the main index and the country's No 1 car maker, down 2.5 percent on news Beijing will cap quotas for new small passenger vehicles at 20,000 per month in 2011.
Hyundai affiliate Kia Motors Corp shed 0.6 percent. China is Hyundai Motor Group's biggest overseas market. "The news is certainly not good, especially for Hyundai Motor's Beijing operations," said Shinhan Investment Corp analyst Kevin Lee. "But if we ask whether this will fundamentally shake Hyundai's Chinese operations, that would be no. The company will shift its strategy, focusing on interior regions of China where new auto demand is exploding," Lee said, adding that the company would probably sell more upscale cars in Beijing to fulfil replacement demand for existing license holders.
SK Energy Co Ltd rallied 4.2 percent to 196,500 won on after South Korea's top crude refiner said late on Thursday that it would sell a 2.7 trillion won ($2.34 billion) stake in SK do Brasil Ltd, a subsidiary in Brazil. "The sale will bring SK Energy a hefty sum, and investors like that," said Woori Investment & Securities analyst Kim Jaeo-joong. "Also, earnings momentum for refiners next year is very strong as demand for crude products is expected to grow robustly."
In a note on Friday, Kyobo Securities raised its target price on SK Energy by nearly 28 percent to 234,000 won, from the previous 183,000 won. Trading volume for SK Energy was high amid ample demand, with volume 1.2 times its average 30-day daily trading volume a mere 2 hours after the market opened.
Hyundai Merchant Marine Co Ltd nearly 6 percent on uncertainty over management control due to the prolonged bidding battle for Hyundai Engineering & Construction Co Ltd. The parent Hyundai Group's failed attempt to take over Hyundai E&C threatens the group's control of the shipping company as its 8.3 percent stake held by Hyundai E&C may go to rival bidder Hyundai Motor Group.
If Hyundai Motor Group wins the bid, it may unite with other shareholders and endanger the group's control of the flagship shipping unit. Airlines fell as oil prices surged to the highest level in more than two years, and as the won weakened, rendering the cost of importing jet fuel more costly. Korean Air Lines Co Ltd lost 0.6 percent and Asiana Airlines Inc fell 1.2 percent.