January 9, 2013 / 2:46 AM / 5 years ago

Seoul shares trade flat as Q4 earnings worry

* Samsung Elec trades flat

* Flour makers up on news of price hike

SEOUL, Jan 9 (Reuters) - Seoul shares were rangebound on Wednesday, trading nearly flat close to mid-session as investors remained cautious before corporate earnings reports.

The Korea Composite Stock Price Index (KOSPI) ticked 0.06 percent higher at 1,999.13 points as of 0228 GMT.

“The main index is trading nearly flat after falling steadily since last week’s rapid gains, due to concerns about lacklustre fourth-quarter earnings outlooks,” said Park Jung-sup, an analyst at Daishin Securities.

He said overall market outlooks for fourth-quarter corporate results have been revised down considerably, but worries for earnings shocks remain.

Thursday’s options expiry and unresolved orders from Mondays’ mistaken KOSPI 200 futures orders had limited effect on the main board, Park added.

Tech heavyweight Samsung Electronics Co Ltd was trading flat near mid-session after falling 1.3 percent on Tuesday despite announcing a better-than-expected estimated fourth-quarter operating profit of $8.3 billion.

Investors favoured defensive plays such as food makers, with flour manufacturers CJ Cheiljedang Corp and Dae Han Flour up at least 2 percent on expectations they are set to increase the price of flour.

Food & beverage shares have risen 9.7 percent in three weeks as of Tuesday, outperforming the main index which has risen 0.1 percent.

Among small- and mid-caps, Tongyang Inc rose 8.1 percent while Tongyang Networks Corp rose by the daily limit of 15 percent near mid-trade.

The Korea Economic Daily reported on Wednesday Tongyang Networks Corp ended negotiations to sell its IT service business to IBM’s South Korean unit for 50 billion won ($47 million).

The report added Tongyang Inc is set to sell its textiles business to South Korea-based Kabul International Co for 80 billion won. Tongyang Inc is the largest shareholder of Tongyang Network Corp.

Local institutional investors net sold 67.3 billion won worth of KOSPI shares near mid-session, while retail and foreign investors were net buyers.

Advancing shares outnumbered decliners 398 to 349.

The KOSPI 200 benchmark of core stocks was flat, while the junior KOSDAQ rose 0.8 percent.

Reporting by Joyce Lee; Editing by Jeremy Laurence

Our Standards:The Thomson Reuters Trust Principles.
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