Seoul shares steady; techs up, banks down
(Updates to mid-morning)
SEOUL, May 6 (Reuters) - Seoul shares traded steady on Tuesday, with gains by chipmakers on higher memory chip prices helping offset losses by banking titles after they reported a weak set of first quarter results last Friday.
Hynix Semiconductor (000660.KS: Quote, Profile, Research, Stock Buzz), the world's No. 2 memory chip maker, gained 1.25 percent to 28,300 won after the firm said on Monday that it raised contract prices for its computer memory chips by around 15 percent in April and expected further price increases in May [ID:nSEO71151], and Samsung Electronics (005930.KS: Quote, Profile, Research, Stock Buzz) also gained 0.55 percent to 735,000 won.
But financials such as Kookmin Bank (060000.KS: Quote, Profile, Research, Stock Buzz) fueled downward momentum after reporting weak first quarter results on Friday and after their Wall Street peers slipped on worries the Bank of America (BAC.N: Quote, Profile, Research, Stock Buzz) may walk away from buying troubled lender Countrywide Financial Corp CFC.N.
The Korea Composite Stock Price Index was up 0.12 percent at 1,850.48 points as of 0120 GMT, hitting another four-month intraday-high.
"Better than expected U.S. employment figures last week offered hopes that the U.S. slowdown is not as severe as many feared," said Kim Joong-hyun, a market analyst at Goodmorning Shinhan Securities.
"The market is steady with a steady stream of buying from institutions and foreigners, but we are not going to see substantial gains after the latest rallies," Kim added.
Kookmin Bank fell 3.64 percent to 68,900 won and Shinhan Financial Group (055550.KS: Quote, Profile, Research, Stock Buzz) dropped 3.4 percent to 56,900 won.
"We have leveled down our target price on Kookmin and have also switched our rating from strong buy to buy on its steeper than expected fall in net interest margins," said Daniel Baek, an analyst at Woori Investment & Securities.
Consumer electronics manufacturers such as LG Electronics (066570.KS: Quote, Profile, Research, Stock Buzz) and LG Display (034220.KS: Quote, Profile, Research, Stock Buzz) gained after the South Korean won <KRW=> continued to fall against the U.S. dollar on Tuesday, boosting their price competitiveness against other global manufacturers.
LG Electronics advanced 1.3 percent to 156,000 won and LG Display gained 4.77 percent to 46,100 won.
LG Display's gains came on the back of an upbeat industry outlook after U.S. LCD glass manufacturer Corning Inc (GLW.N: Quote, Profile, Research, Stock Buzz) unveiled solid first quarter results, analysts said.
"Corning's confidence in its future performance and strong quarterly results boosted sentiment towards LCD makers," said John So, an analyst at Goodmorning Shinhan Securities.
"Also, LG Display did not see as steep gains as its industry peers during the latest tech rallies, making its valuations more attractive," So added.
Transportation issues such as Korean Air Line (003490.KS: Quote, Profile, Research, Stock Buzz) and Asiana Airlines (020560.KS: Quote, Profile, Research, Stock Buzz) fell after oil prices hit a record high on Monday, reviving worries about travel demand and operational costs.
Korean Air fell 3.28 percent to 53,000 won and Asiana Airlines dropped 1.72 percent to 6,270 won.
POSCO (005490.KS: Quote, Profile, Research, Stock Buzz) rose 2.94 percent to 508,000 won after news on Monday that the world's No.4 steelmaker has agreed to acquire 19.99 percent of Australian miner Sandfire Resources NL (SFR.AX: Quote, Profile, Research, Stock Buzz), providing it funds to dig deeper for iron ore and other minerals.[ID:nSYD342408]
(Reporting by Park Jung-youn; Editing by Jonathan Hopfner)
© Thomson Reuters 2008 All rights reserved
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