SEOUL: Seoul shares fell on Wednesday, as investors cashed out following the last dividend payments before the end of the year, but positive US data helped limit losses.
Improving labor market conditions pushed US consumer confidence to an eight month high in December although weak housing prices and mixed manufacturing data remained a source of caution.
"The index is holding on pretty well considering the loss of share appeal on the ex-dividend date, with trading light for the holidays and euro zone debt worries out of sight until the new year," said Won Sang-pil, a market analyst at Tong Yang Securities.
"Historically, losses associated with ex-dividend date profit-taking were fully recovered within a week," he added.
The Korea Composite Stock Price Index (KOSPI) fell 0.98 percent to 1,824.06 points as of 0225 GMT.
Shares with high dividend yields suffered the most, notably in the telecommunications sector.
SK Telecom, South Korea's largest mobile service provider, tumbled 5.96 percent, while No. 2 KT Corp fell 3.98 percent.
"The government keeps on talking about price cuts, and since 3G and 2G services are the mainstay among most handset users, it seems the benefits of Long Term Evolution services will not be reflected until the third quarter of next year," said Jonathan Park, a media market analyst at Hanwha Securities Research Center.
Shinhan Financial Group fell 2.44 percent after it said in a filing that it had decided on 350 billion won ($302.1 million) worth of total dividend payments.
Shares in Hanjin Shipping soared 11.21 percent on rosy industry forecasts following the formation of a major vessel alliance that is expected to boost shipping efficiency.
On Wednesday, North Korea will hold a funeral procession for the late North Korean leader Kim Jong-il, closing a chapter in the deceased ruler's 14-year reign and paving the way for his son, Kim Jong-un, to take control of the unpredictable hermit state.
Institutions sold a net 143.1 billion won worth of shares, while offshore investors were poised to buy for a fourth consecutive session, snapping up a net 43.1 billion won worth.
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