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Shipbuilders, Kia lift market despite tech fall

July 29,2008
Korean stocks edged up yesterday as gains of shipbuilders and Kia Motors overshadowed heavy losses of tech shares like Samsung Electronics, analysts said. The benchmark Kospi rose 0.36 point, or 0.02 percent, to 1,598.29.

Volume was thin at 248.8 million shares worth 3.9 trillion won ($3.9 billion), with gainers outpacing losers 451 to 337.

“The Seoul bourse traded in a narrow range with losses by market leader Samsung Electronics weighing on the market,” said Lee Sun-yup, an analyst at Goodmorning Shinhan Securities.

Market leader Samsung Electronics posted a net profit of 2.1 trillion won in the second quarter, up 50.6 percent from a year ago, but it widely missed analysts’ forecast and its outlook is not bright on worries that a downturn in the global economy will likely dampen consumer demand and squeeze margins in the company.

“Investors will likely take a breather this week, awaiting a set of main economic data in the United States and Korea,” Lee said, adding that the selling spree by foreign investors may wrap up only after worries over a global credit crunch dispel.

Shipbuilders gained ground with industry leader Hyundai Heavy Industries rising 1.2 percent. Kia Motors, the country’s second-largest carmaker, jumped 7.3 percent on a bright outlook for future earnings.

But tech blue chips traded in negative territory, hurt by worries over their earnings. Market bellwether Samsung Electronics fell 2.8 percent to 560,000 won after Morgan Stanley, Goldman, Sachs and Macquarie Group cut their share-price estimates for Samsung.

Chip giant Hynix Semiconductor declined 1.5 percent. Flat-panel giant LG Display lost 2.7 percent. The company said on Sunday it plans to reduce output by about 10 percent by the end of August because of “uncertainty” in the market.

Financial shares also traded weaker. Top lender Kookmin Bank shed 0.7 percent and Shinhan Financial Group, the country’s No. 2 financial services firm, fell 0.9 percent.

On Friday, Wall Street ended higher on stronger-than-expected data on factory orders. The Dow Jones industrial average inched up 0.2 percent and the tech-heavy Nasdaq composite index jumped 1.3 percent. Prices of U.S. oil futures fell $2.23 to $123.26 per barrel. Yonhap, Bloomberg



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