Seoul shares hit record

Seoul shares rose to another record on Tuesday, led by LG.Philips LCD after a brokerage forecast earnings will improve, but chip maker Samsung Electronics dropped to its lowest since August 2005 as its outlook worsened.
Korea Express Co Ltd surged 8.8 percent to 96,400 won, its biggest gain since June 30, 2005, on a media report the transport firm had attracted a bid from trading firm SK Networks.
The benchmark KOSPI has now risen nearly 16 percent so far this year, with gains underpinned by optimism about improving corporate earnings and better consumer demand, as well as a rally in global markets. But the Kosei's relative strength index rose to 85, well above the 70-point level at which a share or index is usually seen as technically overbought.
"The market will continue to gain, but we believe that right now it's overshooting. The chances of a technical correction are high, but stronger global markets, especially in China, have prevented us from falling," said Kim Jeong-hwan, a strategist at Wooer Investment and Securities.
Kim said the brokerage was sticking with its end-year forecast for the KOSPI of 1,820 points, up nearly 10 percent from current levels, even as others are raising their forecasts. The benchmark Korea Composite Stock Price Index (KOSPI) rose 0.23 percent to end at a record close of 1,661.80 points, after hitting an all-time high of 1,666.85.
LG.Philips LCD Co Ltd rose 1.97 percent to 38,750 won after CJ Investment and Securities said it expected earnings at the flat-panel maker to improve this year thanks to rising panel prices.
CJ forecast LG.Philips would swing to an operating profit of 49 billion won ($52.75 million) in the current quarter from a loss a year, with earnings steadily improving for the remainder of the year. Among other gainers, Kia Motors Corp rose 2.11 percent to 12,100 won amid expectations earnings could improve in the current quarter, with investors seeing the auto maker's 11.9 percent fall this year as of Monday as enough.
UBS said on Monday it expected South Korea's second-biggest auto maker to break even starting in the current April-June quarter, thanks to stronger sales and a more stable currency, among other factors. But chip makers dropped after the president and chief executive of iSuppli, an influential US research firm, said the sector would show double-digit loss margins in the current quarter before seeing a bottom in June or July.
Analysts have recently been downgrading their earnings forecasts for the sector, under the assumption that an expected recovery in DRAM memory chip prices may take longer than initially thought.
"There's little possibility of a DRAM rebound in the short term, although we expect DRAM prices to stabilise around June," said Chung Chang-won, an analyst at Daiwa Securities. "The problem is how fast the recovery will be. The market expectations about the second half are now getting lower and lower," he added.
Samsung Electronics Co Ltd, the world's biggest maker of memory chips, fell 2.01 percent to 537,000 won, having touched its lowest level since August 2005. Smaller rival Hynix Semiconductor Inc lost 2.39 percent to 28,650 won.