Seoul shares flat; Samsung buoyed by US ruling, expected record profits

Tue Oct 2, 2012 3:01am EDT

* KOSPI pares earlier gains
    * Samsung Elec rises to near 5-mth high on earnings outlook,
U.S. court decision
    * Automakers mixed

    By Hyunjoo Jin
    SEOUL, Oct 2 (Reuters) - On an otherwise flat day on the
South Korean share market, Samsung Electronics Co Ltd
 gained 1.71 percent to register its highest close in
nearly five months, thanks to buying ahead of quarterly results
due later this week and a favorable U.S. court ruling in its
patent battle with Apple Inc. 
    Goldman Sachs expects Samsung, South Korea's most valuable
stock, to post a fourth consecutive quarter of record profits,
estimating operating profit at 7.8 trillion Korean won ($7.02
billion) for the July to September period, up 83 percent on a
year earlier due to robust sales of Galaxy S III smartphone. 
    A U.S. court also removed a temporary sales ban against
Samsung's Galaxy Tab 10.1, which had been won by Apple 
in a patent dispute, allowing the South Korean electronics maker
to sell the product in the United States. [ID: nL3E8L21BB]
    Elsewhere in the market, investors were reluctant to build
positions on a day wedged between two national holidays.
    The Korea Composite Stock Price Index (KOSPI) closed down
0.01 percent at 1,996.03 points.
    South Korean stock markets were closed on Monday for a
holiday, and will be closed again on Wednesday.
    "The momentum is weak on the 'sandwich' day when trading
volume is thin," Kim Young-joon, an analyst at SK Securities,
said.   
    Foreign investors reduced their net-buying of South Korean
stocks, while institutional investors stepped up selling.
    Persistent concerns over the weak state of the global
economy weighed on sentiment despite a surprising expansion in
U.S. factory activity. U.S. manufacturing grew slightly last
month for the first time since May, but euro zone factories
suffered their worst quarter since early 2009 and factory
activity in China also contracted. 
    South Korean carmakers were mixed, with Hyundai Motor
 down 2.18 percent and Kia Motors jumping
3.46 percent.
    Kia Motors shares recently underperformed sibling Hyundai
Motor, weighed down by concerns that last month's labour strikes
at South Korean plants would hurt its earnings and sales in the
third quarter.  
    But Choi Dae-sik, an analyst at BS Investment & Securities,
said the concerns were overdone.
    Shares in POSCO were flat after a consortium
including the South Korean steelmaker and Noble Group 
urged Arrium directors to continue discussions after
the Australian miner and steel maker rejected a A$1.01 billion
($1.04 billion) takeover offer. 

         Move on day                -0.01 percent    
         12-month high   2,057.28   14 March 2012     
         12-month low    1,666.52   5 Oct 2011                 
         Change on yr               +9.33 percent               
         All-time high   2,231.47   27 April 2011    
         All-time low       93.10   6 January 1981 
    ($1 = 1111.4250 Korean won)

 (Reporting by Hyunjoo Jin; Editing by Simon Cameron-Moore)
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