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Seoul shares see limited gains, SK Hynix tumbles
July 2, 2013 / 2:11 AM / 4 years ago

Seoul shares see limited gains, SK Hynix tumbles

* Seoul share rise, gains capped on institutional selling

* SK Hynix, automakers hit by profit-taking

* STX shares rally on fresh cash injection hopes

SEOUL, July 2 (Reuters) - Seoul shares edged up on Tuesday, buoyed by a rise on Wall Street after solid U.S. manufacturing and construction data, but gains were capped ahead of major earnings and key financial events.

“Recovery momentum has slowed and the market is taking a wait-and-see stance,” said Chung Seung-jae, a market analyst at Mirae Asset Securities.

Investors were taking a cautious stance ahead of Samsung Electronics’ second-quarter earnings estimates, due on Friday, Chung said. Samsung Electronics is the largest component on the main KOSPI, accounting for about 20 percent of market capitalisation.

The market was also watching a European Central Bank monetary policy meeting on July 4, analysts said, where the ECB is expected to keep interest rates at a current record low.

The Korea Composite Stock Price Index was up 0.23 percent at 1,860.05 points as of 0120 GMT.

Foreign investors were buyers of a net 3.8 billion Korean won ($3.36 million) worth of stocks, while institutions were selling a net 35.9 billion won, poised to sell shares for a fourth straight session.

Shares in memory chip maker SK Hynix Inc tumbled more than 6 percent after four straight sessions of gains and were weighed further by views its earnings will peak in the third quarter, analysts said.

SK Hynix shares have risen 22.5 percent so far this year as of Monday’s close, compared with the broader KOSPI’s 7.1 percent fall.

“Demand (for shares) has weakened following a prolonged rally this year. Company earnings are also expected to peak out in the third quarter as are chip prices,” said Jeff Kang, an analyst at Daishin Securities.

“Shares were ripe for profit-taking, though it came a bit earlier than we had expected,” Kang added.

Shares in STX Offshore & Shipbuilding Co Ltd rose by more than 12 percent after a local newspaper reported STX Offshore’s creditors may inject an extra 1.05 trillion won ($927 million) this year to rescue the debt-laden shipbuilder.

A preliminary plan to support STX Offshore, viewed by creditors on Monday, proposed creditors inject the funds by end-2013, plus an additional 1.1 trillion won in rescue funds between 2014 and 2017, according to the Korea Economic Daily on Tuesday.

Shares in STX Offshore’s major shareholder STX Corp rose 8.7 percent, while affiliate bulk shipper STX Pan Ocean Co Ltd advanced 4.2 percent.

A spokesman for STX Offshore’s main creditor, Korea Development Bank, confirmed Monday’s creditors’ meeting but declined to give details.

Automakers lost ground amid profit-taking moves. Hyundai Motor fell 2.9 percent and Kia Motors declined 4.3 percent.

Lee Hyung-sil, an analyst at Shinyougn Investment & Securities, said foreingers were dumping auto shares after their recent sharp rebound.

He said Hyundai’s June sales from domestic plants fell short of expectations despite the resumption of weekend work, which may weigh on auto shares during the session.

Gainers led decliners 400 to 344.

The KOSPI 200 benchmark of core stocks was up 0.2 percent, while the junior KOSDAQ edged 0.3 percent higher.

$1 = 1132.3500 Korean won Reporting by Jungyoun Park; Editing by Jacqueline Wong

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