Seoul shares dropped to a three-week closing low on Monday, dragged down by a 4 percent slide in bourse-heavyweight Samsung Electronics after more brokers cut their profit estimates for the world's biggest memory chipmaker. The Korea Composite Stock Price Index (KOSPI) lost 1.19 percent to 1,825.38 points, falling for the third straight session and retreating further from a five-week high hit on Wednesday.
Samsung Electronics slumped 4.2 percent to a 4-1/2 month closing low after Taurus Securities cut Samsung's second-quarter profit outlook by 240 billion won ($207 million), citing a weak chip sector. SK Hynix, the world's No 2 memory chipmaker, tumbled 4.4 percent. "The pace of recovery in DRAM prices has been much slower than previously estimated, compounded by worries that global macroeconomic woes could also eat into Samsung's handset sales in the second half of the year," said Han Seung-hoon, an analyst at Korea Investment & Securities.
Samsung said on Monday that it expects sales of its new Galaxy III smartphone to top 10 million during July and predicted earnings from its handset division to exceed that of the first quarter, but it wasn't enough to stop the bearish tide. Underperforming large-caps weighed on the KOSPI 200 benchmark of core stocks, which slumped 1.4 percent to outpace declines in the broader market.
The market, still reeling from a flurry of disappointing data last week pointing to a broad slowdown in the global economy, shrugged off a Friday agreement by the euro zone's four largest economies to pursue a growth package worth about 1 percent of the region's gross domestic product.
POSCO, the world's fourth-largest steelmaker, fell 1.4 percent after saying on Friday that its Japanese rival, Nippon Steel, was demanding $1.2 billion in legal compensation, saying POSCO had improperly obtained its electrical steel sheet technology. Shares in Hi-mart Co Ltd tumbled 7.4 percent to an all-time low on investor disappointment that retail giant Lotte Shopping would not be taking a majority stake in the electronics retailer.