Seoul shares fell 2.9 percent on Tuesday to their lowest level in more than seven months as investors soured on the technology sector after flat panel maker LG.Philips LCD slashed its quarterly earnings forecasts. The benchmark Korea Composite Stock Price Index (KOSPI) fell 2.9 percent to end at 1,203.86, its lowest close since finishing at 1,188.95 on November 1, 2005.
Trading volumes were thin, with only 186.8 million shares worth 3 trillion won changing hands as of 0625 GMT, compared with a daily average of 467.6 million shares worth 3.2 trillion won in 2005.
Tech stocks dropped as a lack of confidence in the sector threatened to worsen after LG.Philips LCD Co Ltd, the world's second-biggest flat panel maker, slashed on Monday its second-quarter earnings forecasts beyond analyst expectations. LG.Philips dropped 13.03 percent to 28,700 won, after earlier hitting a record low of 28,100 won.
LG Electronics Inc, a major shareholder in the flat panel maker, fell 4.06 percent to 61,400 won. A sub-index of electronics firms has dropped 21.3 percent this year, compared with a 12.7 percent decline in the KOSPI. Hyundai Motor Co, South Korea's biggest auto maker, fell 4.5 percent to 72,100 won.
Foreign investors were net sellers for a fifth consecutive session, having unloaded a net 162.6 billion won ($169.1 million) worth of shares by 0625 GMT. Decliners trumped gainers by 644 to 118 with 44 titles ending flat. Retail investors bought a net 93.8 billion won in the main bourse, while institutional investors bought a net 4 billion won. The September KOSPI 200 futures index fell 5.60 points to 155.45, while the underlying KOSPI 200 spot index lost 4.62 points to 155.43. South Korea's junior and tech heavy Kosdaq market fell 2.91 percent to finish at 568.64.