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Seoul shares post 25-mth closing high on techs
Reuters - 34 minutes ago
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* Foreign investors log biggest daily purchase in 10 months
* Technology issues lifted by Intel earnings
* Brokerages jump amid hopes of prolonged market rally
By Jungyoun Park
SEOUL, July 14 - Seoul shares posted an over two-year closing high on Wednesday as technology issues such as Samsung Electronics <005930.KS> soared on Intel's positive earnings, but POSCO <005490.KS> retreated on outlook worries.
The Korea Composite Stock Price Index <.KS11> finished up 1.32 percent at 1,758.01 points, its highest close since mid-June 2008.
"The latest global market developments have been positive, namely a smooth Greek treasury bill auction and stronger than expected key U.S. corporate earnings. As investors grow more optimistic they are grabbing shares in firms with promising growth and earnings outlooks," said Choi Seong-lak, a market analyst at SK Securities.
Foreign investors were buyers of a net 905 billion won worth of stocks, their biggest daily purchase since mid-September 2009.
Volume was heavy at 560 million shares, significantly higher than July's average daily trading volume of 379 million shares.
The KOSPI is now about 2.6 percent above its 20-day moving average of 1,713 points, and its relative strength index has hit the overbought territory mark of 70.
"The main index should hit 1,800 points pretty soon, though it may take some time for it to settle comfortably at that level," said Lee Sun-yeb, a market analyst at Shinhan Investment Corporation.
Shares in Samsung Electronics, the world's No.1 memory chip maker, gained 3.52 percent.
Hynix Semiconductor <000660.KS> advanced 3.41 percent, further boosted by a report earlier on Wednesday major shareholders of the firm had proposed LG Group take over 5 percent of it as they seek to sell down their stakes in the world's No.2 memory chip maker.[ID:nTOE66D00P]
"Intel earnings are boosting appetite for memory chip issues. However I remain more cautious about the third quarter outlook as chip prices are seen weakening in the second half," said Han Seung-hoon, an analyst at Korea Investment & Securities.
Shares in POSCO <005490.KS> fell 2.3 percent to 488,500 won as some brokers slashed forecasts following a warning from the world's No.3 steelmaker that its second-half profit may sag 30 percent.
"Management is cautious about the H2 outlook, expecting more significant raw material cost elevations," Citigroup analyst Park Sungmee said in a note.
"Our concern is more on steel prices as the steel price decline in China affects global prices," Park said.
Citigroup cut POSCO's target price by 6 percent to 630,000 won and 2010 net profit estimate by 9 percent.
Brokerages advanced, with shares in Samsung Securities <016360.KS> climbing 5.96 percent and Woori Investment & Securities <005940.KS> jumping 9.35 percent.
"Brokerages traded strong on expectations for the market's rally to continue, but this doesn't necessarily mean their earnings will enjoy as strong an upward momentum," said Sung Yong-hoon, an analyst at Shinhan Investment Corporation.
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