(Updates to mid-morning)
SEOUL, May 27 (Reuters) - Seoul shares traded higher
on Tuesday after six consecutive losses that pushed the main
index down 4.7 percent, with technology shares such as Samsung
Electronics (005930.KS) leading the rebound.
Chipmakers such as Samsung Electronics and Hynix
Semiconductor (000660.KS) rose after losses in the previous
session on expectations improved DRAM pricing would translate
into stronger earnings in the second quarter.
However shares in LG Electronics (066570.KS) continued to
face pressure from talks of price cuts and the imminent entry
into the South Korean market of world No.1 handset maker Nokia
(NOK1V.HE).
LG Elec was down 0.71 percent to 139,500 won.
The Korea Composite Stock Price Index was up 0.81 percent to
1,815.13 points, but still down 4.5 percent from the year's peak
of 1,901 reached May 19.
"With oil prices finishing steady on Monday and after the
main index's near 5-percent recent drop, shares are rebounding
modestly," said Y.S. Rhoo, an analyst at Hyundai Securities.
"Since U.S. stock and commodities markets were closed
yesterday, investors are waiting to see how U.S. crude futures
will trade and how equities will respond to developments on
commodities front," Rhoo added.
The market gained strength from Samsung Electronics, which
rose 2.8 percent to 698,000 won, and Hynix, which rose 1.22
percent to 28,950 won on the back of an increasingly favourable
chip price outlook.
"Average DRAM prices in the second quarter are expected to
rise 5 to 7 percent from the previous quarter; not great, but
better than the low-single digit increase previously forecast,"
said Jay Kim, an analyst at Hyundai Securities.
Analsysts said prices would hold up through the third quarter
despite recent comments by a Samsung Elec executive that the
company was looking to more than double DRAM chip shipments this
year.
"Unless there is a dramatic turn of events, such as drastic
increases in supply by other rivals or a significant output cut
by PC makers, prices will make gradual gains through the end of
September," Kim said.
But energy cost-sensitive manufacturers such as Hyundai Motor
(005380.KS) and Kia Motors (000270.KS) fell on oil prices
remaining above $133 per barrel, with Hyundai down 1.43 percent
to 83,000 won and Kia down 1.2 percent to 12,350 won.
Crude refiner SK Energy (096770.KS) rose 5.91 percent to
125,500 won on expectations the sector will increase the volume
of more profitable lighter-oil refining.
SK Energy shares were also boosted by news on Monday that
Sinopec Corp (0386.HK) will sign a deal with South Korea's top
refiner to jointly build a petrochemical complex in central
China. This makes SK Energy one of only a handful of foreign
firms to invest in China's petrochemical industry, which has been
expanding at a double-digit annual rate in recent years.
[ID:nPEK163643]
S-Oil (010950.KS) rose 4.17 percent to 74,900 won and GS
Holdings (078930.KS) went up 4.75 percent to 48,500 won.
