SEOUL: Seoul shares edged lower on Wednesday after the market posted a record high the previous session, led by falls in technology plays and banks, including Samsung Electronics Co Ltd.
The Korea Composite Stock Price Index (KOSPI) ended down 0.17 percent at 2,126.71 points.
"The market is taking a breather at the index's current level. But continued foreign buying comes as a positive sign," said Kim Soo-young, a market analyst at KB Investment & Securities.
"Foreign investors appear to be taking on a yen-carry trade," Kim said, adding that they were borrowing yen at a lower interest rate to buy assets in markets where the currency was seen strengthening, such as South Korea.
Foreign investors were buyers of a net 513.3 billion Korean won ($472 million) worth of stocks, picking up shares for a 16th consecutive session.
South Korea's top financial regulator said on Wednesday more than half of foreign purchases of Seoul stocks were short-term investments following last month's massive earthquake in Japan.
Listed South Korean firms were seen enjoying comparative advantage due to the shutdown of Japanese peers, particularly in chemicals, refinery, and auto parts-making industries.
Shares in Samsung Electronics fell 2.3 percent ahead of a scheduled announcement of first quarter earnings estimates on Thursday, as the world's No.1 memory chip maker is seen reporting a third consecutive quarterly drop in earnings.
"Investors were growing more wary before its scheduled earnings estimate announcement," said Chung Seung-jae, a market analyst at Mirae Asset Securities.
Hyundai Hysco Co Ltd, a steelmaking affiliate of Hyundai Motor Group, jumped 8 percent on a positive earnings outlook.
"Hyundai Motor Co and Kia Motors Corp, its two major clients, are doing very well and are increasing output. This will in turn increase demand for Hyundai Hysco products," said Eugene Investment & Securities analyst Kim Gyeong-joong.
Hyundai Hysco is expected to record revenue of 6.68 trillion Korean won ($6.14 billion) for 2011, according to Thomson Reuters I/B/E/S. This would be up 14 percent from 2010's 5.85 trillion won.
"Hyundai Hysco will easily post solid double-digit earnings growth through 2014," Kim said.
Telecommunications issues lost ground after local media reported the South Korean government planned to issue measures aimed at cutting telecommunications fees, as part of ongoing efforts to rein in inflation.
Shares in SK Telecom fell 1.2 percent and KT Corp declined 0.9 percent.
Refiners continued bouncing for a second day after sharp falls on Monday following news of product price cuts.
Shares in S-Oil , the country's No.3 crude oil refiner, rose 2.7 percent and SK Innovation , the country's No.1, advanced 1.5 percent.
Automakers rallied, with Hyundai Motor surging 3.2 percent and Kia Motors climbing 4.3 percent.
"Automakers' first quarter earnings are seen very strong, and their valuation is also cheap compared to other peers," said Choi Dae-shik, an analyst at HI Investment & Securities.
Hyundai Motor shares traded at a 12-month forward price earnings multiple of 8.4, compared with Toyota's 15.5 and Honda's 9.8, Thomson Reuters Starmine data showed.
LG Chem rose 1.9 percent after the chemicals maker on Wednesday raised its 2015 sales target for electric car batteries by a third to 4 trillion won ($3.7 billion), and doubled its investment plan for the product to 2 trillion won by 2013 to reflect strong order growth.
Shipping firms dragged, hurt by a 2.4 percent fall in the Baltic Dry Index , which tracks the cost of shipping key commodities.
Shares in STX Pan Ocean dipped 1.5 percent and Hyundai Merchant Marine lost 2.4 percent.
The KOSPI 200 June futures fell 0.4 points to 283.40 and the KOSPI 200 spot index shed 0.68 points to 281.35. The junior Kosdaq market ended down 0.68 percent at 533.98.
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