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Seoul: Stocks track regional markets lower; Samsung Elec lends support
[SEOUL] South Korean shares were weaker early on Thursday, tracking a wider global pullback from recent highs, but losses were mitigated by tech heavyweight Samsung Electronics, which rose over 2 per cent on a stronger earnings outlook.
Asian shares ticked down from recent peaks on Thursday after a long-awaited US tax plan failed to inspire investors.
Meanwhile, Samsung said it expected earnings to further improve in the second quarter, after it reported its best quarterly profit for the January-March period since 2013 thanks to a memory chip boom.
The Korea Composite Stock Price Index (Kospi) was down 0.2 per cent at 2,202.60 points as of 0234 GMT, as investors took profits on recent gains. The Kospi reached a near six-year high on Wednesday on improved investor sentiment and easing geopolitical concerns.
"Foreign investors' demand for Samsung Electronics is high today but they are selling shares in other sectors to take profits from the Kospi, which has risen significantly in a short period," said Bae Sung-Young, a stock analyst at KB Securities.
Samsung SDS and Samsung C&T both fell more than 6 per cent as Samsung Elec said it had decided not to adopt a holding company structure, rejecting demands from US activist hedge fund Elliott Management.
Hyundai Motor was down 1.7 per cent and Naver Corp 2.5 per cent.
Mr Bae added that despite a downward movement of Kospi for the day, the index is apt to rise further on support of strong fundamentals among the companies in sectors such as major finance, steel and metal, chemicals, and oil.
Investors did not react to South Korea's gross domestic product data, which showed the economy accelerated in the first quarter of 2017 from the previous three months on strong exports and capital investment.
Offshore investors were expected to break five-day buying spree, selling a net 42 billion Korean won (S$51.89 million) worth of Kospi shares near mid-session.
Decliners outnumbered advancers 512 to 265.
The South Korean won slumped as US President Donald Trump unveiled a tax cut plan overnight, which only drew a cautions welcome from fiscal conservatives and financial markets.
The won was quoted at 1,129.6 to the US dollar, down 0.4 per cent compared to Wednesday's close of 1,125.1.
June futures on three-year treasury bonds gained 0.02 point to 109.44.