January 6, 2014 / 3:05 AM / 4 years ago

Seoul shares edge higher after 4-mth low; earnings caution remains

* Investors await Samsung Elec Q4 guidance, BOK rate meeting

* Foreigners turn net buyers for first time in 3 sessions

SEOUL, Jan 6 (Reuters) - Seoul shares edged higher on Monday, regaining some ground after hitting a four-month closing low in the previous session, although the Japanese yen’s weakness and concerns about China’s economy were keeping investors cautious about local firms’ earnings prospects.

The Korea Composite Stock Price Index (KOSPI) was up 0.5 percent at 1,955.59 points as of 0257 GMT, after shedding 1.1 percent on Friday.

Analysts said the KOSPI may be forming a bottom after sliding 2.8 percent last week, with shares of index heavyweights like Samsung Electronics Co and Hyundai Motor Co rising in early trade on bargain hunting.

Foreign investors were net buyers of 12.9 billion Korean won ($12.23 million) of shares, marking the first net inflow in three trading days.

“A wait-and-see attitude is prevalent, with Samsung Electronics set to offer its earnings guidance tomorrow,” said Hyundai Securities analyst Bae Sung-young. “Some brokerages are also saying that there is greater possibility that the Bank of Korea will cut interest rates at its policy meeting Thursday.”

Though the won was down against both the dollar and the yen in early trade on Monday, investors remained concerned about local manufacturers’ earnings prospects amid expectations that Japanese currency’s weakness will hurt South Korean companies’ price competitiveness and erode their profit margins.

Meanwhile, a private sector survey showed that China’s services sector growth eased to its weakest in more than two years, adding to signs of slowing momentum for the world’s second-largest economy and South Korea’s biggest exports market.

But some analysts said the KOSPI looks oversold and appears poised for a technical rebound, with valuations looking cheap.

E-Trade Securities said in a report that the 200-week moving average of 1,923 should offer a bottom for the index and that any further fall to around those levels should offer a buying opportunity.

Shares of Hyundai Motor and Samsung Electronics were up 2.7 percent and 0.8 percent, respectively, on bargain hunting following last week’s decline on earnings concerns.

But construction firms Samsung Engineering Co and Hyundai Engineering & Construction Co were down 5.1 percent and 2.4 percent, respectively, amid growing worries that their October-December earnings will miss expectations.

Advancers outnumbered decliners 394 to 376.

The KOSPI 200 benchmark of core stocks was up 0.6 percent, while the junior KOSDAQ edged 0.1 percent higher. ($1 = 1055.1500 Korean won) (Reporting by Se Young Lee; Editing by Chris Gallagher)

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