Seoul shares ended flat on Monday but Hyundai Heavy surged to a record on speculation the ship maker would report solid earnings, while technology stocks added to recent falls on worries of slower earnings growth next year.
Trading volumes were thin as investors braced for a week heavy with earnings. Tobacco firm KT&G Corp rose 1.06 percent to 57,100 won after posting better-than-expected earnings on the back of growing sales of premium products.
Foreign investors were major sellers, parting with a net 353.2 billion won ($368.6 million) worth according to data at 0630 GMT - marking their eighth consecutive day of sales, and bringing their net sales total this year to $10.23 billion. The benchmark Korea Composite Stock Price Index (KOSPI) rose 0.05 percent to end at 1,364.95 points.
Hyundai Heavy Industries Co Ltd climbed 3.97 percent to a record 144,000 won on speculation the world's biggest shipbuilder would report better-than-expected quarterly earnings next month due to a surge in more profitable orders. Shipbuilder shares have rallied this year as brimming orderbooks are expected to offset the impact of a strong won currency on overseas orders and higher steel plate prices.
"In terms of earnings improvements, most shipbuilders will report better numbers from now on. Earning visibility is looking good," said P.J. Yoon, an analyst at Samsung Securities.
Yoon estimated most shipbuilders were booked to full capacity until 2009. Among other gainers, SK Networks, the oil trading unit of conglomerate SK Group, jumped 4.3 percent to 29,100 won after saying on Friday net profit in its third quarter more than doubled from a year earlier.
SK Corp surged 3.17 percent to 65,000 won amid market talk that the country's biggest oil refiner would buy back shares, prompting the Korea Exchange, the country's market operator to request the firm respond to the speculation by Tuesday at noon.
But broader gains were capped as technology shares extended recent falls on worries that earnings growth would slow more than expected in the first half of 2007, typically a period of lower seasonal demand for technology consumer products compared to the Christmas period.
Jae H. Lee, an analyst at Daiwa Securities, said investors appeared especially concerned that prices for memory chips would be weaker than expected and that there would be less demand for flat panels next year. Samsung Electronics Co Ltd, the world's biggest maker of memory chips, fell 0.95 percent to 625,000 won, bringing the loss over the past five consecutive sessions to 3.8 percent.
LG.Philips LCD Co Ltd, slid 2.38 percent to 28,750 won. The flat panel maker has now lost 5.4 percent since disappointing investors with its earnings guidance on October 10. Among other decliners, Kookmin Bank fell 2.42 percent to 76,600 won on market speculation that it may fund its planned $7.3 billion acquisition of smaller rival Korea Exchange Bank (KEB) without support from other investors.
Investors had expected Kookmin to raise about $2 billion through outside sources to help pay for the deal. Trade volume reached 235.4 million shares worth 2.75 trillion won, data at 0630 GMT showed, compared to 269.2 million shares worth 3.2 trillion won on Friday. Gainers outnumbered decliners by 425 to 310 with 90 titles ending flat.
Retail investors bought a net 208.1 billion won, while institutional investors purchased a net 118 billion won. The December KOSPI 200 futures index edged up 0.05 point to 178.70, while the underlying KOSPI 200 spot index added 0.01 point to 177.36. South Korea's junior and tech heavy Kosdaq market rose 0.71 percent to finish at 586.79.