S.Korea stocks edge down after Samsung Elec's weak Q2 earnings guidance

Mon Jul 7, 2014 11:15pm EDT

* Samsung Elec's weak Q2 earnings guidance sours sentiment
    * Won little changed, eye on comments from nominee fin min

    SEOUL, July 8 (Reuters) - South Korean shares ticked lower
on Tuesday morning as investors turned cautious after market
bellwether Samsung Electronics offered weaker-than-expected
second quarter earnings guidance, with focus shifting towards a
possible easing in fiscal or monetary policy. 
    The Korea Composite Stock Price Index (KOSPI) was
down 0.3 percent at 1,999.87 points as of 0310 GMT, on track for
a third consecutive session of losses.
    "(Samsung Electronics' earnings guidance) has not changed
anything in the market as downwards adjustment on earnings has
been ongoing for months," said SK Securities analyst Ko
Seung-hee.
    However, "weak figures are certainly bad for sentiment as
they indicate earnings are likely to hamper the market's rise
despite a brightening global economic outlook," he added. 
     Samsung Electronics Co Ltd on Tuesday said
operating profit likely fell 24.5 percent to 7.2 trillion Korean
won in April-June, its lowest in two years and well below the 
8.3 trillion won mean estimate of a Thomson Reuters I/B/E/S
poll. 
    But shares in Samsung Electronics, the world's largest
mobile handset maker, were up 0.5 percent after adding as much
as 2.1 percent earlier on short-covering and bargain-hunting.
    Telecoms and utilities were in the red, with the two largest
mobile carriers SK Telecom Co Ltd and KT Corp
 dropping 2.8 percent and 2.4 percent, respectively.
State-run utilities company Korea Electric Power Corp
 fell 2 percent.
    Offshore investors underpinned the main bourse, purchasing a
net 50 billion won ($49.5 million) worth of KOSPI shares near
mid-session after bringing in nearly 1.4 trillion won during an
eight-day net buying spree through Monday.
    In the local currency market, the won was quoted
at 1,011.2 versus the dollar as of 0230 GMT, compared with
Monday's onshore close at 1,010.5.
    A parliamentary hearing put nominee finance minister
Kyung-hwan in the spotlight, with investors scouring his
testimony for comments on the exchange rate or a possible
supplementary budget to boost the economy.
    So far in the parliamentary hearing session Choi has warned
of increased downside risks to economic growth. 
    Lead-September futures on three-year treasury bonds were up
0.01 points at 106.67 on foreign capital inflow.
    Continuous foreign net buying in treasury bond futures
reflected wagering in the market on a possible policy easing. 
    On Monday, offshore investors net purchased an all-time
record amount in September futures on 10-year treasury bonds
<0#10TB:>, picking up 565.5 billion Korean won worth.    
                       0230 GMT    Prev close
 Dollar/won            1,011.2       1,010.5
 Yen/won            9.9371/293        9.9244
 *KTB futures           106.67        106.66
 KOSPI                1,999.14      2,005.12
 * Front-month futures on three-year treasury bonds
($1 = 1010.9000 South Korean Won)

 (Reporting by Jungmin Jang)