Seoul shares edge up; shrug off soft Samsung Elec Q4 forecas
Bareksa • 07 Jan 2014
Employees of the Korea Exchange pose in front of the final stock price index during a photo opportunity for the media at the ceremonial closing event of the 2013 stock market at the Korea Exchange (KRX) in Seoul December 30, 2013. (REUTERS/Kim Hong-Ji)
Investors look for bargains as yen worries ease; Upside could be limited as investors eye U.S., China data
Reuters - Seoul shares edged higher in early trading on Tuesday, shrugging off Samsung Electronics Co's disappointing fourth-quarter forecast on bargain hunting and easing concerns about the yen's fall.
The Korea Composite Stock Price Index (KOSPI) was up 0.3 percent at 1,958.77 as of 0145 GMT, on track to record its second consecutive day of gains.
Samsung Electronics earlier on Tuesday said it expects its fourth-quarter operating profit to fall 18 percent from the July-September period to 8.3 trillion Korean won ($7.79 billion), well below the 9.75 trillion won Thomson Reuters' Starmine SmartEstimate of 23 analysts.
Some analysts had said poor numbers from South Korea's largest company by market capitalisation could weigh on the overall index, but investors appeared to have shrugged off the news and were looking for bargain hunting opportunities.
"Although Samsung's forecast came in well below consensus, the market is taking it in a stride and seeing it as an elimination of an uncertainty," said IBK Securities analyst Kim Soon-young. "The yen-won rate has picked up recently, so that's also boosting the autos-related exporters."
The South Korean won recorded its biggest drop in 6-1/2 months against the dollar on Monday, which in turn drove it lower against the yen.
The won's slide continued in early domestic trade Tuesday, further easing concerns about local exporters' price competitiveness.
Foreigners were net buyers of 72.2 billion won worth of local stocks early Tuesday, marking the second straight session of offshore inflows.
"The Kospi is attempting to stage a rebound after hitting important support levels, and it's more likely that this pickup will be sustained," Tong Yang Securities said in a report, adding that 2,000 will serve as an important resistance level for the index going forward.
But IBK's Kim said the market's upside may be limited with investors waiting for key events such as the U.S. employment data due this Friday. Latest set of economic indicators from China, due later this week, will also be watched closely.
Shares of Kia Motors Corp and Hyundai Motor Co rose 1.3 percent and 0.4 percent, respectively, as the won's recent slide against the yen eased concerns about the automakers' earnings prospects.
Samsung Electronics' shares were down 0.1 percent in early trade, however, as weaker-than-expected earnings outlook raised fresh doubts about the company's prospects this year.
Advancers outnumbered decliners 459 to 293.
The KOSPI 200 benchmark of core stocks was up 0.2 percent, while the junior KOSDAQ was 0.5 percent higher. ($1 = 1065.5000 Korean won)