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S. Korean shares fall despite positive earnings

04-29-2011 16:18 BJT

SEOUL, April 29 (Xinhua) -- South Korean shares ended 0.72 percent lower on Friday as foreign investors sought profit-taking despite positive earnings, analysts said.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 15. 99 points, or 0.72 percent, to 2,192.36. Trading volume stood at 359.9 million shares worth 11.26 trillion won (10.51 billion U.S. dollars).

The KOSPI started higher on Wall Street gains overnight, but turned into the negative territory in the early morning session as expectations for corporate earnings eased amid earning season nearing to an end.

"Investors locked in profits as expectations for corporate earnings have eased ahead of the end of earning season. Historically, local stocks do not move up strongly in May due to lack of upward momentum right after the earning season," Kang Hyun- gie, a Seoul-based analyst at Solomon Investment & Securities, told Xinhua.

Offshore investors led the market declines by swinging to net sellers during the morning trading. Foreigners' selling triggered sales by program traders, which drove down the key index.

Overseas investors were net sellers almost all over the session, but turned into net buyers as they bought local stocks massively in the last minutes of trading. Foreigners purchased a net 73.9 billion won worth of local stocks.

Program traders also shifted to net buyers in the last minutes of trading, which ended up purchasing a net 60.4 billion won worth of shares. Retail investors were net buyers of a net 129.6 billion won worth of stocks, but institutional investors dumped a net 239. 5 billion won worth of shares.

Chemical and auto shares, which led the recent gains, lost ground on demand for profit-taking. Top oil refiner SK Innovation plunged 7.2 percent to 232,000 won, and its smaller rival S-Oil slid 4.49 percent to 159,500 won.

SK Innovation reported its first-quarter net profit nearly tripled on-year to 853.3 billion won, and S-oil's net income came in at 545.8 billion won in the first quarter.

Leading automaker Hyundai Motor slipped 1.6 percent to 246,500 won, and its affiliate Kia Motors dropped 3.51 percent to 76,900 won despite their positive earnings outcome.

Hyundai Motor's net income jumped 46.5 percent on-year to 1.88 trillion won in the first quarter thanks to brisk sales from overseas. Kia Motors posted a record high of first-quarter net profit worth 953 billion won on strong overseas and domestic sales.

Tech shares also ended in the negative territory. Market bellwether Samsung Electronics lost 0.78 percent to 893,000 won, and chip giant Hynix Semiconductor shed 1.6 percent to 33,800 won.

Samsung's net profit diminished 30 percent on-year to 2.78 trillion won in the first three months of this year, and Hynix said its first-quarter net income tumbled 66.2 percent to 273.5 billion won.

Bank issues, however, jumped on earning surprise. Industry leader KB Financial Group climbed 5.12 percent to 57,500 won, and its smaller rival Shinhan Financial Group picked up 6.06 percent to 52,500 won.

KB Financial said Thursday that its first-quarter net profit grew 23.3 percent on-year to 757.6 billion won on increased interest margin and decreased loan-loss reserves.

"Bank and financial shares rose sharply as they sought to fill the gap with auto and chemical plays which have led the market rally. But, they will unlikely become winners down the road due to uncertainties surrounding the government's future real estate policies," Kang at Solomon Investment & Securities said.

The local currency finished at 1,071.50 won against the greenback, down 0.3 won from Thursday's close.

Bond prices ended higher. The yield on the liquid three-year treasury notes fell 0.02 percentage point to 3.77 percent, and the return on the benchmark five-year government bonds lost 0.04 percentage point to 4.1 percent.

Editor:Yang Jie |Source: Xinhua

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