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Tuesday May 8, 2:37 PMSeoul shares end off peak but Hyundai Heavy shinesSEOUL, May 8 (Reuters) - Seoul shares fell 0.1 percent on Tuesday to mark their first decline in five sessions, as concerns that the recent record-setting rally might have been overdone kicked in, but brisk earnings boosted Hyundai Heavy Industries.Hyundai Heavy , the world's largest shipbuilder, shot up 9.58 percent to 286,000 won, off a record 295,000 won hit earlier in the session, a day after reporting a forecast-beating 15-fold surge in quarterly profits. [ID:nSEO63738] But investors dumped exporters such as Hyundai Motor on worries a firm won would eat into profits earned abroad and make local products more expensive overseas, and banks slipped due to expectations falling interest margins would weigh on earnings. The benchmark Korea Composite Stock Price Index (KOSPI) eased 0.11 percent to end at 1,582.65 points, after hitting an all-time high of 1,589.07 earlier in the session. "The possibility of a short-term correction is rising," said Kim Hak-kyun, a market analyst at Goodmorning Shinhan Securities. "But any falls would be more of a breather than a wide drop, because better-than-expected corporate earnings in the first quarter have brightened the outlook for the rest of the year and the economy is widely expected to recover in the second half." The benchmark hit a relative strength index of 77 on Tuesday, above the 70-point level at which a share or index is seen by some as technically overbought. As of Friday, the KOSPI had gained for ninth consecutive weeks, its longest streak since November 2005 to January 2006, having set a string of records along the way. Hyundai Heavy's record results prompted UBS and other banks to raise earnings forecasts and cemented optimism the sector's profits would improve this year and beyond, sending world's No.2 shipbuilder Daewoo Shipbuilding up 1.3 percent to 38,650 won and Hyundai Mipo Dockyard up 5.99 percent. Shares in steel makers rallied on expectations a series of recent price hikes and buoyant global demand for steel would boost profits in 2007, with POSCO Co. Ltd. up 1.88 percent at 406,000 won a day after announcing its fifth price rise this year. Dongkuk Steel Mill Co. jumped 4.55 percent to 28,700 won after it confirmed that it is in negotiations to raise the prices of steel plates used to make ships to reflect higher raw material costs. Flat-screen maker LG.Philips LCD rose 2.76 percent to 41,000 won as analysts bet the loss-making company would break even in the second quarter thanks to fast-rebounding panel prices. However, lenders extended their recent slide on persistent concerns earnings will slow from record profits seen in the first quarter, with fierce competition continuing to pressure net interest margins, a key profitability gauge in the sector. Top lender Kookmin Bank slid 0.37 percent to 81,700 won, and No.2 Shinhan Financial Group shed 1.17 percent to 50,600 won. Third-ranked Woori Financial Group was off 2.95 percent at 21,400 won. |
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