Market flat as nuclear summit approachesKorean stocks finished almost unchanged yesterday as the absence of new momentum and upcoming events such as the nuclear summit put investors on the sidelines, analysts said.
After moving in a narrow range, the benchmark Kospi ended at 2,026.12, down 0.05 percent, or 1.11 points. Trading volume was moderate at 534 million shares worth 5.22 trillion won ($4.62 billion) with losers leading gainers 569 to 265.
“The big picture has not changed. Investors are wary of whether the Kospi can sustain its high level as it nears the keenly watched 2,050 level and fund redemptions are continuing while there are no clear buyers,” said Han Bum-ho, a market analyst at Shinhan Investment.
“Investors may continue to wait-and-see to assess the results of the upcoming events such as earnings reports, economic data and the summit next week.”
Global political leaders, including U.S. President Barack Obama and China’s President Hu Jintao, are scheduled to visit Seoul for a nuclear security summit next week to discuss ways to prevent nuclear weapons programs and ensure atomic safety.
The decline was led by shipping companies as their earnings were expected to take a beating from rising oil prices. Hanjin Shipping tumbled 8.43 percent to 15,200 won.
STX Offshore & Shipbuilding slumped 6.12 percent to 15,350 won, hit by institutional and foreign sell-offs.
Korean Air Lines, Korea’s biggest carrier, fell the most in three weeks of trading after Samsung Securities cut its profit estimate.
The carrier tumbled 3.5 percent to 51,800 won at the close of trading, the biggest decline since Feb. 27. Asiana Airlines, Korea’s second-biggest carrier, fell 2.7 percent to 7,310 won. Korean Air overestimated its passenger growth while expanding routes and seat capacity, Park Eun-kyung, an analyst at Samsung Securities, wrote in a report yesterday after the market closed. First-quarter operating profit will plunge 88 percent to 19.5 billion won from a year earlier, according to the analyst.
“This falls considerably short of our operating profit forecast of 120.5 billion won and market consensus estimates of 92 billion won,” wrote Park, who has a buy rating on the company.
Steel maker Posco dropped 1.28 percent to 385,000 won. Yonhap, Bloomberg
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