Chinese manufacturing output grew last month for the first time in more than a year but a surprise contraction in US factory activity tempered optimism for the health of the world economy. Heavyweights ended the session lower after choppy trade, with Hyundai Motor edging down 0.2 percent despite solid US sales gains in November. Samsung Electronics finished flat.
POSCO lost 1.9 percent after news that the South Korean steelmaker had retained exclusive negotiating rights to acquire a stake in a Canadian iron ore mine operator controlled by ArcelorMittal. The Korea Economic Daily reported on Tuesday that POSCO has invited South Korea's National Pension Service to act as a financial investor in the deal, expected to be worth more than $1 billion.
"Investors have no problems with POSCO seeking to secure steelmaking materials, but the price does matter. Investors are concerned about potentially high acquisition prices, which are sending POSCO shares down today," said Kim Yun-sang, an analyst at LIG Investment & Securities. Telecom stocks, regarded as defensive stocks because of their stable dividends, bucked the market decline, with LG Uplus up 0.8 percent and SK Telecom rising 0.99 percent.
Apparel companies also bucked the market fall on Tuesday, with the textile & wear sub-index up 1.5 percent, driven by expectations that South Korea's unusually low temperatures would boost demand for their products. Decliners outnumbered gaining shares 430 to 368. The KOSPI 200 benchmark of core stocks declined 0.3 percent, while the junior KOSDAQ rose 0.8 percent.