Seoul shares fell 0.2 percent on Friday, retreating from a record close, after chip makers such as Hynix Semiconductor slumped on worries about DRAM chip prices, while a surge in oil prices hit fuel-dependent stocks.
Citicorp slashed its second quarter and 2007 earnings estimates for Samsung Electronics Co Ltd and Hynix, saying a turnaround in DRAM memory chip prices was unlikely in the current quarter.
But the benchmark KOSPI still ended up 0.54 percent for the week, marking its 11th consecutive weekly gain and matching a winning streak that had lasted from November 2005 to January 2006. "Q2 results could be bad due to weakness in DRAM prices. NAND flash is not going to be able to make up for the falling prices of DRAM.
Investors are especially worried about Highness, as it could post an operating loss this quarter," said Kim Young-min, a fund manager at SH Asset Management. The benchmark Korea Composite Stock Price Index (KOSPI) fell 0.21 percent to end at 1,612.25 points, off a record close of 1,615.58 points hit in the previous session.
Shares remain volatile this week, with the KOSPI reacting mainly to global markets, especially in the United States and China, which are South Korea's top two export markets.
Trading is likely to remain volatile, analysts warned. The KOSPI is just 0.6 percent away from an all-time high of 1,622.16 points hit on Monday, but chances of a pullback are also growing, given concerns that a rally in global markets is looking vulnerable.
"These days we are moving in tandem with global markets. The chances of a correction next week look high, especially if markets in China and the US tumble. It may be time to take profits," said Cho Hee-yeop, deputy general manager of asset management strategy at Korea Investment and Securities.