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Seoul: Stocks slump on Samsung's earning shock; won falls

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[SEOUL] South Korea's Kospi stock index tumbled on Tuesday as the country's largest electronics companies flagged earning shock, chilling investor sentiment. The South Korean won fell while bond yields also fell.

Shares of tech giant Samsung Electronics Co Ltd closed down 1.7 per cent after it surprised the market on Tuesday with an estimated 29 per cent drop in quarterly profit, blaming weak chip demand in a rare commentary issued to "ease confusion" among investors already fretting about a global tech slowdown.

LG Electronics Inc ended 3.6 per cent lower after the company reported its fourth-quarter operating profit, while likely fell 80 per cent from the same period a year earlier, far below analyst expectations.

At 0630 GMT, the Kospi closed down 11.83 points, or 0.58 per cent, at 2,025.27.

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LG Electronics' fourth-quarter earnings hovered far below expectations, following that of Samsung Electronics', which chilled market's expectations on next week's earnings season, said Huh Jae-hwan, an analyst at Eugene Investment & Securities.

Hanjin Heavy Industries & Construction Co Ltd's stock plunged 27.4 per cent after its Philippines unit Subic Shipyard filed for court rehabilitation proceedings.

Korea Development Bank said in its statement that the slump in global shipping and shipbuilding industry has led Subic Shipyard to file court rehabilitation proceedings, but the unit's suspension will barely affect the headquarter's business.

Dongbu Steel Co Ltd's stock surged nearly 30 per cent for a second session after local media report over its top shareholder Korea Development Bank's plan on stake sale. Dongbu Steel said on Monday that it has no plan on top shareholder's stake sale, while it plans to issue new shares to for new investment and transfer of management control.

South Korean firms related to North Korea rose after reports on North's leader Kim Jong Un's visit to China at the invitation of Chinese President Xi Jinping, amid preparations for second Kim-Trump summit. Shares of Ananti Inc and Namkwang Engineering & Construction Co Ltd closed up 19.2 per cent and 10.0 per cent, respectively.

The won was quoted at 1,124.1 per dollar on the onshore settlement platform, 0.49 per cent weaker than its previous close at 1,118.6.

In offshore trading, the won was quoted at 1,123.74 per U.S. dollar, down 0.63 per cent from the previous day, while in one-year non-deliverable forwards it was being transacted at 1,105.85 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.19 per cent, after US stocks ended the previous session with mild gains. Japanese stocks rose 0.82 per cent.

The current price-to-earnings ratio is 12.10, the dividend yield is 1.28 per cent and the market capitalisation is 1,242.04 trillion won.

The trading volume during the session on the Kospi index was 390,699,000 shares and, of the total traded issues of 898, the number of advancing shares was 370.

Foreigners were net sellers of 25,791 million won worth of shares.

The won's high for the year is 1,114.7 per dollar on Jan 2, 2019 and low is 1,130.05 on Jan 3, 2019.

In money and debt markets, March futures on three-year treasury bonds rose 0.01 points to 109.29.

The Korean three-month Certificate of Deposit benchmark rate was quoted at 1.86 per cent, while the benchmark 3-year Korean treasury bond yielded 1.803 per cent, lower than the previous day's 1.81 per cent.

REUTERS