Seoul shares dipped on Tuesday as crude oil refiners including S-Oil lost ground, with sentiment pressured by a recent spate of weak US data supporting a bearish economic outlook. The Korea Composite Stock Price Index finished down 0.65 percent at 2,099.71 points. KOSPI 200 June futures shed 1.8 points to 277.60 points and the KOSPI 200 spot index declined 1.87 points to 276.97. The junior Kosdaq market ended down 0.69 percent at 472.80.
"The market's falls are fairly limited on the back of solid foreign investor buying. Drops below 2,100 points are being contained," said Chung Seung-jae, a market analyst at Mirae Asset Securities, referring to the market's 60-day moving average. Foreign investors were buyers of a net 219.7 billion won ($203.4 million) worth of stocks, picking up shares for a second straight session.
Analysts however warned that caution would continue to rule the market throughout the week. "Investors will continue to approach the market with caution ahead of the Bank of Korea's interest rate decision and options expiry later this week," said Bae Sung-young, a market analyst at Hyundai Securities. Banks outperformed, with KB Financial Group edging down a mere 0.2 percent and Woori Finance Holdings ending flat.
"We saw some re-allocation away from much-gained chemicals issues to banks, which have underperformed for months, as their earnings are seen recovering in the second quarter," said Hwang Seok-kyu, an analyst at Kyobo Securities. KB Financial Group had fallen 11 percent and Woori Finance Holdings 5 percent in the past six months, compared with the KOSPI's 3.1 percent gain for the same period.
KB Financial's 12-month forward price earnings multiple stood at 7.6, compared with the broader KOSPI's 10, Starmine data showed. KB Financial's price-to-book value ratio was 0.9, while the KOSPI's stood at 1.5. Shares in Hana Financial Group ended up 0.9 percent after a media report Hana and US buyout fund Lone Star have agreed to extend the $4.3 billion take-over deal of Korea Exchange Bank for six months. Crude oil refiners lost ground as crude oil futures extended the previous session's losses on Thursday amid expectations Opec would increase production targets this week and concerns of a slowdown in demand.
Falls in crude oil prices generally translate into lower product prices and sales for domestic refiners. Shares in S-Oil, the country's No 3 refiner, dropped 3.4 percent and SK Innovation, South Korea's top refiner, tumbled 5.8 percent. Hynix Semiconductor rose 3.4 percent after posting a near-20 percent fall over the past month.