Seoul shares flat as offshore demand offsets losses

Tue Jan 7, 2014 9:49pm EST

* Foreign buying offsets institutional sell-off

* Samsung Elec falls for 2nd day after earnings estimates

SEOUL Jan 8 (Reuters) - Seoul shares were flat early on Wednesday, with foreign demand supporting the main bourse while institutions were largely sellers, tightly capping the stock market's gains.

The Korea Composite Stock Price Index (KOSPI) was flat at 1,959.73 points as of 0231 GMT.

Foreigners warmed to risky assets on Wednesday after data showed that the U.S. trade deficit shrank to its lowest in four years, boosting expectations for global economic growth.

Samsung Electronics Co Ltd, which accounts for around a fifth of South Korea's stock market value, fell half a percent a day after the market heavyweight said it expects its fourth-quarter operating profit to fall 18 percent from the previous quarter.

"Downward corrections of South Korean company earnings due to a stronger won are expected to have a limited impact on the market because it's been happening for a while and traders have already factored that in," said Seo Myung-jin, a market analyst at Kiwoom Securities in a note to clients.

Other stocks had mixed performances, with winners slightly outnumbering losers 388 to 371.

Meanwhile, SK Hynix was up more than 3 percent in early trade as foreigners snapped up shares after U.S. memory chip maker Micron Technology reported a much higher-than-expected profit in the first quarter.

Stocks for Hotel Shilla, an affiliate of Samsung Group, soared more than 10 percent on Wednesday after reports that it secured rights to operate perfume and cosmetics stores at Singapore's Changi Airport.

Foreign investors net purchased 66.8 billion won ($62.53 million) worth of KOSPI shares near the mid-session, buttressing the index. Institutions were net sellers of 79.5 billion won worth of South Korean stocks.

The KOSPI 200 benchmark of core stocks was flat, while the junior KOSDAQ was up 0.9 percent.

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