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Seoul shares fall for 1st time in 3 days, earnings worries weigh
January 31, 2013 / 3:30 AM / in 5 years

Seoul shares fall for 1st time in 3 days, earnings worries weigh

* KOSPI falls 0.3 pct

* Financials lose on profit-taking

* Automakers regain ground as won eases

* LG Elec, S-Oil fall on weak earnings

SEOUL, Jan 31 (Reuters) - Seoul shares succumbed to profit-taking on Thursday after two days of gains, with financials leading the index lower amid concerns about the health of domestic corporate earnings and the U.S. economy.

The Korea Composite Stock Price Index (KOSPI) has underperformed Asia shares this month, weighed down by a stronger local currency that eats into the value of overseas earnings of its tech and auto exporters.

It managed to stage a small rally after marking it lowest point in over a month on Jan. 28 but the upside for now looks capped and it was trading 0.3 percent lower at 1,958.41 points as of 0247 GMT.

“The market momentum remains weak, hurt by worries that corporate earnings will slow down,” said Park Seok-hyun, an analyst at KTB Investment & Securities.

Sentiment was hurt after the U.S. Federal Reserve said on Wednesday that the growth in the world’s biggest economy had stalled while data showed that the U.S. economy fell unexpected in the December quarter.

But auto shares rebounded after the South Korean government warned of stronger capital flow controls to curb speculation, pushing the South Korean won lower.

Hyundai Motor, South Korea’s top automaker, firmed 1.2 percent, while second-ranked Kia Motors gained 2.6 percent.


LG Electronics was the latest company to miss consensus forecasts and its stock fell 1.9 percent as weak profitability in its TV division overshadowed a recovery for its smartphones.

Morgan Stanley slashed its outlook for LG Electronics’ 2013 operating profit by 14 percent to 1.24 trillion won, reflecting the firm’s weak guidance and the firmer South Korean currency.

Among financials that fell after recent sharp gains, Shinhan Financial Group lost 3.7 percent, while KB Financial Group fell 3.4 percent.

Ssangyong Motor jumped by the daily limit of 15 percent after rival political parties agreed to form a joint body to discuss the automaker’s layoffs in 2009 and other issues. The move eased political uncertainty over the automaker, and may help avoid a parliamentary probe demanded by labour circles, analysts said.

S-Oil fell 2 percent after the refiner reported that its operating profit slumped 82 percent to 71.7 billion won in the December quarter, from a year earlier. (Reporting by Hyunjoo Jin; Editing by Edwina Gibbs)

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