Seoul shares rebound

Seoul shares rebounded on Friday after sharp falls in the previous session, but a seventh straight session of foreign selling capped gains. Foreign investors were net sellers of 117.2 billion won ($107.9 million) worth of stocks, setting their longest selling streak in nearly a year.
"Smart, short-term money which flowed in March and April is withdrawing. I am getting a sense that a lot of it is European," said Chung Yun-sik, a chief investment officer at ING Investment Management, adding that the pullback could be linked to ongoing debt issues and the fragility of the banking sector in Europe.
"Uncertainty around the direction the US Fed will take is another thing making investors edgy. They are sensing the end of quantitative easing and liquidity measures is near," said Kim Hyoung-ryoul, a market analyst at NH Investment & Securities. Chung added, however, that foreign selling momentum was peaking and that he expected it to slow by June. The Korea Composite Stock Price Index finished up 0.76 percent at 2,111.50 points.
Banks and construction plays underperformed after South Korea's financial supervisor said additional real estate project financing loans might go sour due to the prolonged slump in the property market.
Shares in Woori Finance Holdings fell 0.4 percent and Shinhan Financial Group slipped 0.42 percent. Hyundai Engineering & Construction lost 1.3 percent and Joongang Construction ended flat. Hana Financial Group bucked the banking sector trend, rising 4.2 percent after news it and US buyout fund Lone Star were weighing extending the deadline for Hana's $4.1 billion take-over deal of Korea Exchange Bank.
Defensive plays outperformed, with Lotte Confectionary rising 1.7 percent and Orion Corp, a snacks maker, climbing 2.4 percent. The market drew support from a rebound in automakers. Shares in Hyundai Motor advanced 3.2 percent and Kia Motors climbed 1 percent. KOSPI 200 June futures gained 1.55 points to 278.50 and the KOSPI 200 spot index ended up 2.12 points to 278.59. The junior Kosdaq market ended down 0.16 percent at 486.24.