(LEAD) Seoul shares end 1.28 pct lower on tech, auto losses

(ATTN: ADDS bond yields at bottom)
SEOUL, Jan. 7 (Yonhap) -- South Korean stocks closed 1.28 percent lower Thursday
as investors offloaded tech blue chips and automakers on the local currency's
gain, analysts said. The won rose against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) declined 21.87 points to
1,683.45. Volume was moderate at 456.5 million shares worth 7.38 trillion won
(US$6.5 billion) with losers outpacing gainers 484 to 311.
"Institutional investors unloaded Samsung Electronics despite its brisk earnings
estimate as they already priced in expected strong earnings," said Bae
Sung-young, an analyst at Hyundai Securities. "Investors are closely watching the
movement of the local currency and oil prices."
Institutional and retail investors sold local stocks, weighing down on the
market. But offshore investors snapped up a net 222.8 billion won worth of local
stocks on the main bourse.
Tech blue chips, bank and automakers traded in negative territory. Market leader
Samsung Electronics lost 3.33 percent to 813,000 won, despite its strong
fourth-quarter earnings guidance. Before the market opened, the world's largest
maker of memory chips said that the median of its consolidated fourth-quarter
operating profit is estimated at 3.7 trillion won. The firm returned to profit
last quarter from a loss a year earlier.
Consumer electronics giant LG Electronics tumbled 7.63 percent to 115,000 won and
flat panel giant LG Display declined 5.76 percent to 39,300 won.
Top carmaker Hyundai Motor shed 4.5 percent to 106,000 won and its affiliate Kia
Motors fell 4.53 percent to 18,950 won.
But shipbuilders gained ground on expectations that a global economic recovery
would help boost business for the shipbuilding sector. Top shipyard Hyundai Heavy
Industries advanced 9.3 percent to 194,000 won and Hyundai Mipo Dockyard jumped
by the daily limit of 15 percent to 116,000 won.
The local currency closed at 1,135.40 won to the U.S. dollar, up 1 won from
Wednesday's close and the strongest level since Sept 17, 2008, as offshore
investors increased their holdings of local shares, traders said.
In the morning session, the Korean unit rose to an intra-day high of 1,129 won at
one point, but later it trimmed earlier advances on local importers' dollar
buying for settlement, they added.
Bond prices, which move inversely to yields, closed higher on expectations that
an early rate hike by the central bank may not come. The yield on the benchmark
three-year Treasury note fell 0.11 percentage point to 4.32 percent, and the
return on five-year government bonds declined 0.1 percentage point to 4.84
percent.
South Korea's vice finance minister will regularly attend the rate-setting
committee of the Bank of Korea starting this year in order to voice the
government's opinion on the overall monetary policy direction and economic
management, government officials said later in the day.
sooyeon@yna.co.kr
(END)

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