(Updates to mid-morning)
SEOUL, April 29 (Reuters) - Seoul shares traded down on
Tuesday on caution ahead of a U.S. Fed interest rate meeting and
after the South Korean government warned on Monday that the
nation's economy is in an early stage of downturn.
Major exporter shares such as Samsung Electronics (005930.KS)
fell 1.26 to 707,000 won on concerns about the U.S. economy ahead
of GDP data on Wednesday and after billionaire investor Warren
Buffett said on Monday that the U.S. could be in a longer and
deeper recession than most people think.
The Korea Composite Stock Price Index was down 0.34 percent
at 1,817.40 points as of 0154 GMT. The index is still up 15
percent from the March 17 close of 1,574.44, an 11-month low, but
down more than 4 percent on the year.
"The market is not so optimistic about the U.S. GDP data and
is particularly eyeing the Fed's comments from its policy
meeting," said Y.S. Rhoo, a market analyst at Hyundai Securities.
"If comments imply that no further rate cuts are expected for
some time, investors will most likely be disappointed and Seoul
market will have harder time getting above the 1,830," Rhoo added.
South Korean government's admittance of an economic downturn
has also dampened the market sentiment, analysts said.
COLD STEEL
Steelmakers such POSCO (005490.KS) fell on worries about
rising raw material prices, although Hyundai Steel (004020.KS)
gained 1.58 percent to 77,000 won after reporting
better-than-expected quarterly earnings on Monday.
POSCO fell 1.42 percent to 48,5000 won and Dongbu Steel
(016380.KS) lost 0.74 percent to 13,350.
But some technology shares such as LG Display (034220.KS) and
LG Electronics (066570.KS) rose on a solid LCD and handset market
outlook for the fiscal 2008 following recent strong first quarter
earnings from the sectors.
LG Display rose 0.93 percent to 43,350 won and LG Electronics
gained 0.99 percent to 152,500 won.
"Despite the worries about a U.S. recession and a global
slowdown, demand from emerging markets for consumer electronics
will continue to be robust," said Kevin Lee, an analyst at Woori
Investment & Securities.
"South Korean electronics manufacturers are expected to raise
their market share in handset and TV sectors," Lee added.
LG Telecom (032640.KS) rose 3.4 percent to 8,510 won after
the smallest of South Korea's three mobile phone operators
reported a 15 percent year-on-year jump in its first quarter net
profit on Tuesday.
However, carriers such as Korean Air Line (003490.KS) and
Asiana Airlines (020560.KS) fell after oil prices hit a fresh
peak near $120 a barrel on Monday, raising concerns about the
company's operating margins.
Korean Air fell 4.41 percent to 51,900 won and Asiana
Airlines dropped 1.73 percent to 6,250 won.
Hyundai Motor (005380.KS) advanced 0.36 percent to 83,800 won
after South Korea's top carmaker said on Monday that it plans to
invest a total of 11 trillion won ($11.04 billion) this year, up
7 percent from 2007.[ID:nSEO362132]
(Reporting by Park Jung-youn; Editing by Keiron Henderson)
