Seoul shares ended steady Monday after trading in negative territory for most of the session on worries about the tech sector outlook, but solid Samsung SDI results boosted sentiment and trimmed losses by technology issues. The Korea Composite Stock Price Index closed up 0.02 percent to 1,598.29 points, after falling to as low as 1,588.56.
"The volume of the tech selloff thinned in the afternoon after surprisingly solid Samsung SDI quarterly earnings lifted sentiment and cast some light on a dark sectoral outlook," said Kim Hyoung-ryoul, a market analyst at NH Investment & Securities.
"Shares that were oversold climbed a bit and cut their losses, helping the index finish relatively flat," said Lim Tae-geun, an analyst at Daewoo Securities. Shares in Samsung SDI trimmed losses after company said on Monday it swung to a quarterly profit after posting six straight quarters of losses, helped by a strong battery business that offset weakness in its plasma unit.
Samsung SDI closed 0.24 percent higher at 84,300 won, up from the session low of 81,300 won. LG Display dropped after the world's No 2 maker of liquid crystal display (LCD) screens said on Sunday it would cut its panel output by 10 percent until August due to weakening global demand. LG Display was down 2.74 percent to 30,150 won.
Shares in Samsung Electronics extended losses to fall nearly 3 percent after its quarterly net profit missed forecasts and the company voiced concerns about a grim second half outlook. "We slightly lower our target price (on Samsung Elec) by 5 percent...but are getting bullish on a 12-month investment horizon," Lehman Brothers said in its report on Monday.
However, Lehman kept its 1-overweight investment rating on the company, saying valuations had almost reached a five-year trough and that Samsung's competitive edge over its peers was increasing. Shares in the world's No 1 memory chip maker closed down 2.78 percent to 560,000 won.
Kookmin Bank shed 0.7 percent to 57,000 won ahead of its second-quarter earnings announcement on Monday. South Korea's top commercial lender said after the closing bell that net profit more than doubled from a low base last year, as its tax bill dropped and lending growth accelerated. However the bank's second half outlook still remains grim, analysts said.
"The second-half outlook is not bright. It will be fortunate for Kookmin if it can only maintain NIM (net interest margin) at the current level," said Shin Kyu-kwang, an analyst at SK Securities.
"Banks will likely see provisioning costs rising in the second half against loans for small- and medium-size firms, especially those in the construction sector, as the economy slows. Meanwhile the government has asked banks to avoid an aggressive expansion, and maintaining profits is difficult without asset growth."
Shares in Industrial Bank of Korea (IBK) rose 0.64 percent to 15,650 won, outperforming the sector's 0.2 percent fall, after the regulatory Financial Services Commission said on Monday that the timing of IBK's privatisation needed to be controlled.
The comment, made in a statement prepared for a parliamentary hearing, signalled a delay in the sale or reduction of the government's 58 percent stake in IBK. Analysts said the likely delay eased overhang worries amid the current stock market downturn.
Shares in KTF continued to drop on Monday to end 0.94 percent lower at 26,400 won after the company reported on Friday a net loss of 31.5 billion won ($31.32 million) for the second quarter from a 51.1 billion won profit a year earlier, hit by marketing costs for third-generation mobile services.