* KOSPI erases early gains on profit-taking
* Foreign net buying underpins main index
* Samsung SDI, Cheil Industries jump on merger deal
SEOUL, March 31 Seoul shares were nearly flat
after hitting their highest level in almost three months on
Monday, as profit-taking by some investors offset a boost from
hopes that China would take steps to stimulate its economy.
The Korea Composite Stock Price Index (KOSPI) was up
0.01 percent at 1,981.26 points as of 0202 GMT after hitting an
intraday high of 1,989.80, its strongest level since Jan. 2.
At its current level, the KOSPI would eke out a 0.1 percent
gain for the month.
Investors took heart from comments by Chinese Premier Li
Keqiang on Friday that Beijing is ready to support its cooling
economy, saying it had the necessary policies in place and would
push ahead with infrastructure investment.
Samsung Securities analyst Kim Yong-goo, however, said:
"It's difficult for the market to solely move on talks about
stimulus with no concrete plan to back them up."
Kim added that the local market could price in hopes of
stimulus steps from China and the euro zone, but a major rise
will be hampered until investors shake off doubts about
first-quarter corporate earnings in the coming weeks.
Foreign investors purchased a net 82.2 billion won ($77
million) worth of KOSPI shares by midsession, headed for a
fourth straight session of net buying.
Samsung SDI Co Ltd jumped 6.6 percent and its
electronics materials affiliate Cheil Industries Inc
climbed 5.5 percent, after Samsung SDI announced before the open
that it would acquire Cheil through a share swap.
SDI will offer Cheil shareholders 0.44 SDI share for each
Cheil share they own and the new company will have annual sales
of around 10 trillion won ($9.4 billion).
Dongbu Steel Co Ltd plunged 9.1 percent as
investors locked in profits following a 25 percent jump over the
previous two sessions, after media reports said that steelmaker
POSCO may consider buying some steel and energy
assets of the company.
Decliners outnumbered advancers 426 to 326.
The tech-heavy junior KOSDAQ edged down 0.3 percent.
($1 = 1069.3000 Korean Won)
(Reporting by Jungmin Jang; Editing by Chris Gallagher)