SEOUL: Seoul shares slipped on Monday, weighed by falls in steelmakers and financials such as POSCO and KB Financial Group, but shipyards climbed on sustained order momentum.
The Korea Composite Stock Price Index (KOSPI) ended down 0.39 percent or 7.84 points at 2,005.30 points.
"The market's mild volatility within a fairly limited range will continue until the economic and policy backdrop become clearer," said Won Jong-hyuck, a market analyst at SK Securities.
Steelmakers lost ground amid concerns China's tightening may crimp the country's demand for steel. The country moved on Friday to raise banks' required reserves to a record 19.5 percent.
"Tighter monetary policy may slow economic expansion, which in turn will affect steel demand," said Bang Min-jin, an analyst at Solomon Investment & Securities.
"We also saw steel price corrections in China last week, which are an added negative," Bang added.
Shares in POSCO, the world's No.3 steelmaker, fell 3.3 percent and Hyundai Steel dipped 3.7 percent.
Shares in parts maker Hyundai Wia ended at 70,200 won on their first trading day on the main KOSPI, up 8 percent from its initial public offering price of 65,000 won but off a session high of 76,500 won.
Shipyards continued rallying as order expectations strengthened.
Shares in Daewoo Shipbuilding & Marine Engineering rose 4.8 percent after the shipbuilder said on Monday it expected to win a 2 trillion won ($1.80 billion) order from A.P. Moeller-Maersk AS to build 10 of the world's biggest type of container ships.
Shares in Samsung Heavy Industries rallied 6.4 percent.
Crude refiners also bucked the downward trend, with S-Oil gaining 6.3 percent to 118,000 won and SK Innovation , South Korea's biggest crude refiner, rising 4.9 percent to 183,500 won.
"We are very bullish on the crude refining sector this year as demand from emerging countries like China for refined oil products is rising fast but output is limited," said Sohn Ji-woo, an analyst at Solomon Investment & Securities."
"Domestic crude refiners have also started manufacturing textile chemicals, for which there's very strong demand," Sohn said, adding that his 12-month target price on S-Oil was 140,000 won and on SK Innovation, 250,000 won.
But falls in financials pressured the market.
Shares in KB Financial Group, the holding firm of South Korea's biggest lender Kookmin Bank, fell 1.6 percent and Hana Financial Group shed 1.1 percent. Woori Investment & Securities declined percent and Mirae Asset Securities fell 1.4 percent.
Korea Express Co Ltd rallied 5.05 percent after a local media report on Sunday said managers of the sale of a controlling stake in the logistics company had sent teaser letters to 10 potential buyers.
Trading turnover stood at 5.9 trillion won, compared with average daily turnover of around 7.7 trillion won in January.
The KOSPI 200 March futures index fell 1.75 points to 263.95 points. The KOSPI 200 spot index slipped 1.25 points to 264.55 points.
The junior Kosdaq index gained 0.39 percent to 520.59 points.
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