* Samsung Elec down more than 3 pct at hit 10-week low
* Hyundai, Kia lose further ground on weak earnings
* Korea Exchange Bank up more than 6 pct on share swap
By Joyce Lee
SEOUL, Jan 28 South Korean shares closed at nearly a two-month low on Monday as a weakening yen compounded concerns about weak corporate earnings and outlooks, while large moves in the won currency encouraged foreign investors to take profits.
The Korea Composite Stock Price Index (KOSPI) closed down 0.4 percent at 1,939.71 points, its lowest closing since Dec. 4.
"Automakers extended losses on concern over the weak yen and large dent in Q4 operating profits, while techs like Samsung Electronics fell on worries the smartphone market won't keep up its current growth rate," said Ko Seung-hee, an analyst at SK Securities.
He added the steep move in the won-dollar exchange rate also spurred foreign investors to take profits.
Foreign investors net sold more than 500 billion won ($465.42 million) for the second session in a row, dragging down the index in the largest foreign selloff since Sept. 23, 2011.
The South Korean won declined by more than 1 percent against the dollar in domestic trade on Monday, and was quoted at 1,093.1 at the close in its biggest daily decline since December 2011.
The currency had steadily strengthened against the dollar by 75.34 won, or 6.7 percent, between the start of September and Jan. 11, driving up the price of South Korean shares.
Since then, the won has fell by 37.1 won, or 3.5 percent, against the dollar as of Monday.
Heavyweight Samsung Electronics fell 3.2 percent to 1.372 million won per share, its lowest closing since Nov. 20.
"Concerns about South Korean tech firms' fundamentals has increased, with high-end smartphone device shipments expected to slow down this year," said Park Young-joo, an analyst at Woori Investment & Securities.
U.S. fund manager Vanguard's decision to switch from the MSCI index to the FTSE to track markets for its $67 billion emerging market fund is also seen pressuring the tech heavyweight, as it is expected to wipe 2.45 trillion won in foreign funds from Samsung alone.
Automakers lost ground for a third session, with Hyundai Motor down 1.2 percent while sibling Kia Motors slid 1.5 percent in the aftermath of weaker-than-expected earnings last week.
Among daily movers, Korea Exchange Bank (KEB) jumped 6.3 percent after parent company Hana Financial Group Inc announced on Monday it will seek 100 percent of Korea Exchange Bank through a share swap.
The planned swap of 5.28 KEB shares for 1 Hana Financial share will be completed in early April, with KEB to be delisted by April 26.
Declining shares outnumbered winners 442 to 390. The KOSPI 200 benchmark of core stocks was down 0.6 percent, while the junior KOSDAQ fell 0.5 percent.
Move on day -0.36 percent
12-month high 2,057.28 14 March 2012
12-month low 1,769.31 25 July 2012
Change on yr -4.5 percent
All-time high 2,231.47 27 April 2011
All-time low 93.10 6 January 1981 ($1 = 1074.3000 Korean won) (Reporting by Joyce Lee; Editing by Kim Coghill)