Seoul shares ended lower after volatile trade on Friday, weighed down by losses in Samsung Electronics, which fell despite posting strong results. Samsung Elec shed 5.58 percent, posting its biggest daily percentage loss in more than three months since mid-January, despite reporting a 619 billion won ($458.1 million) net profit for the first quarter, substantially more than the market consensus.
But its operating profit came slightly below market estimates. The company said non-operating income rose mainly on contributions from its units and affiliates and that it was too early to announce a recovery in demand or prices. "Such cautious outlook comments by Samsung Elec, forecasting a rather slow recovery of the chip industry, prompted investors to book profits," said Kim Young-june, an analyst at KTB Securities.
Shares in the world's No 1 memory chipmaker had gained 39 percent so far this year as of Thursday's closing compared with the main KOSPI's 22 percent rise. Analysts also said that speculation of an earnings surprise prior to the results announcement, and concerns over relative weakness of the won, which had helped South Korean chip sales but perhaps not for the rest of the year, also weighed. The Korea Composite Stock Price Index (KOSPI) finished down 1.07 percent at 1,354.10 points.
"Now that key South Korean corporate results are out, markets which had been rising on the back of results expectations have lost some steam. There is profit-taking as investors move to lock in gains made this month," said Won Jong-hyuck, a market analyst at SK Securities. "Investors are shifting their interests to potentially less positive developments, such as the outcome of US bank stress tests due in early May," said Hwang Keum-dan, a market analyst at Samsung Securities, adding however that a complete change of the market's direction was unlikely. Shares in Hynix Semiconductor, which posted smaller-than-expected operating losses on Friday, cut their earlier gains to end 4.73 percent lower.
But banks advanced across the board, helped by rises in their US peers and as investors shifted their interest from the technology sector to financials, said Choi Jong-won, an analyst at Tong Yang Securities. KB Financial Group ended 1.47 percent higher and Shinhan Financial Group rose 2.07 percent. Kia Motors fell 4.21 percent despite quarterly earnings figures that beat market estimates, following a recent rally. Shares in Kia Motors had gained 12.5 percent as of Thursday's closing from a week ago, compared with the broader market's 2.9 percent gain.