April 5, 2012 / 3:22 AM / 6 years ago

Seoul shares pare losses after falling to near 1-mth low

* Market briefly falls below 2,000 level

* Brokerages lead broad declines in high-beta sectors

* Automakers rise on strong sales and outlook

By Joonhee Yu

SEOUL, April 5 (Reuters) - Seoul shares pared losses after falling beneath a key chart level to a near one-month low on Thursday, weighed down by a weak Spanish debt auction and dashed hopes of additional U.S. stimulus measures.

The Korea Composite Stock Price Index (KOSPI) was down 0.32 percent at 2,012.08 points at 0250 GMT after briefly falling more than 1 percent to inch below the 2,000-point level.

“Weak bond auction results in Spain highlights a deeper underlying problem. The debt itself is not an issue as long as it’s supported by sufficient enough growth to support it, but Spain’s weak outlook on growth does not paint a pretty picture,” said Park Suk-hyun, an analyst at KTB Securities.

Spanish government bond yields shot up on Wednesday, flagging risks of a further surge in borrowing costs after a medium-term debt auction spread concerns that the euro zone debt crisis is intensifying again.

Volatile high-beta stocks extended their run of declines, with brokerage counters posting the steepest losses. Daewoo Securities fell 4.3 percent while Woori Investment & Securities was down 3.6 percent.

Shipyards also weighed on the index as STX Offshore & Shipbuilding slid 3.7 percent and Daewoo Shipbuilding & Marine Engineering was down 2.8 percent.

GS Engineering & Construction shares were down 3.8 percent after announcing via regulatory filing that it was withdrawing from Cambodia’s IFC skyscraper project due to the weak local real estate market.

Automakers, however, continued their recent rally, riding strong U.S. sales figures and positive outlook on earnings and future business conditions. Hyundai Motor rose 2.4 percent while KIA Motors gained 1.3 percent.

KT&G, South Korea’s leading tobacco-maker, gained 2.7 percent after announcing plans for a new luxury cigarette brand co-developed with Italian carmaker Lamborghini later this month.

Reporting by Joonhee Yu

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