South Korean shares fell nearly 1.6 percent on Monday to a one-month closing low after disappointing US jobs figures put investors even further on the defensive ahead of a slew of economic data from China and US corporate earnings. "The market is still lacking momentum, and in the wake of last week's gains it was itching for a correction and the right pretext was provided for a pullback, but it's not the start of a bearish trend," said Cho Sung-joon, an analyst at NH Securities.
The Korea Composite Stock Price Index (KOSPI) fell 1.57 percent to close at 1,997.08 points, the lowest level since early March and below the psychologically significant 2,000 point threshold. On Friday, data showed US payrolls grew by 120,000 in March, far below the expected gain of 203,000 jobs and the smallest increase since October, casting doubts on the strength of the US economic recovery. South Korean blue chip technology and auto shares, which have been major outperformers in recent sessions on positive earnings outlooks, posted broad declines on fears of slowing US demand.
Memory-chip maker SK Hynix tumbled 4.1 percent, while auto-parts maker Hyundai Mobis fell 2.9 percent to highlight falls among respective peers. High-beta stocks such as builders and financials underperformed. Samsung Engineering tumbled 4.7 percent and Woori Finance Holdings plunged 5.1 percent.
"Bank shares had been riding high on eased funding risks after the settling of jitters in Europe, but now investors feel that their share prices have clearly overshot where its fundamentals dictate they should be," said Lee Chang-wook, an analyst at Taurus Securities.
However, defence shares bucked the downward trend and rallied sharply, with Victek and Speco each soaring by their daily ceiling of 15 percent following news reports that North Korea was preparing a third nuclear test to go along with its plans for a rocket launch later this month. Biopharmaceutical pioneer Medipost also jumped by its daily 15 percent limit after media reports said its off-the-shelf stem cell drug, Cartistem, was due to hit the market as early as May.
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