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Seoul shares slip as Hynix leads tech slide
Reuters - Wednesday, August 11
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* Tech shares falter on weak profit outlook
* Hynix drops 4.4 pct following tumbles in U.S. chip stocks
* Ssangyong 15-pct limit down on concerns of bid failure
SEOUL, Aug 11 - Seoul shares slipped on Wednesday, as lingering uncertainty over the global economic recovery and weak product demand dimmed the profit outlook for technology shares such as Hynix Semiconductor <000660.KS>.
The Korea Composite Stock Price Index <.KS11> was headed for a second day of declines, shedding 0.8 percent to 1,767.38 points as of 0150 GMT.
The index has renewed its 2010 highs since last week but consistently failed to break above the key 1,800 point level, trading in a narrow 30-points range.
"The market is losing its momentum because economic indicators are sending no firm recovery signals," said Kim Hyung-ryol, an analyst at NH Investment & Securities.
"Concerns are especially growing over the technology sector due to growing signs of oversupply and steeper price falls. Trade will remain subdued until we get clearer evidence on where the economy is heading."
Ahead of the central bank's monthly interest rate policy meeting on Thursday, South Korea said on Wednesday the seasonally adjusted unemployment rate rose to 3.7 percent in July from 3.5 percent in June, underscoring doubts about a sustained recovery in domestic demand. [ID:nTOE67908U]
Shares in Hynix, the world's No.2 memory chip maker, dropped 4.4 percent in heavy trade after Intel Corp <INTC.O> and Advanced Micro Devices Inc <AMD.N> sank on Tuesday, hit by concerns of weaker-than-expected PC sales in the current quarter.
"Our checks showed order books for Taiwan notebook PC makers, which are a global benchmark for notebook sales, dropped 20 percent in July from June," said Greg Noh, an analyst at HMC Securities.
"On top of overall demand weakness, consumers' switch to tablet PCs is putting further pressure on notebook sales and DRAM chip demand, as tablets usually require less DRAM chips."
Shares in LG Display <034220.KS>, which makes flat screens for notebooks and computers, shed 3.7 percent and its affiliate LG Electronics Inc <066570.KS> declined 2.4 percent.
Ssangyong Motor <003620.KS> shares tumbled by the daily limit of 15 percent due to concerns that it may fail to find a buyer after Renault-Nissan <RENA.PA> <7201.T> pulled out of the bidding for the country's smallest automaker.
A South Korean court plans to pick preferred bidders for the company this week, a Ssangyong spokesman said.
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