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South Korea shares sink to 7-month low, hurt by earnings shortfall
July 25, 2012 / 8:03 AM / 5 years ago

South Korea shares sink to 7-month low, hurt by earnings shortfall

 * KOSPI falls 1.4 pct to its lowest level since Dec
 * Apple earnings miss weighs on key part suppliers
 * LG Elec falls on handset woes despite doubled Q2 profits
 By Joonhee Yu
 SEOUL, July 25 (Reuters) - South Korean shares fell to a
seven-month low on Wednesday as investors cut risky bets on
fears that Europe's debt crisis is worsening and after
disappointing earnings from U.S. firms that source their
supplies from Korean companies. 
 The Korea Composite Stock Price Index (KOSPI) fell
1.37 percent to close at 1,769.31 points, trimming some losses
after sinking to a session low of 1,758.99 during early trade.
 "The selloff wasn't huge by any measure, but the market is
exposed to volatile swings right now when volume is so low from
dampened risk appetite," said Song Chang-sung, an analyst at
Hanyang Securities.
 Spain's soaring borrowing costs underscored its refinancing
difficulties amid rescue calls from its indebted regions and
troubled banks, stoking fears that the euro zone's
fourth-largest economy could seek the assistance of
international lenders.
 The protracted debt crisis in Europe was seen hurting
corporate earnings, with Apple Inc's April-June results
falling short of expectations and sending shockwaves throughout
its key Asian suppliers.
 LG Display, a supplier of LCD screens for the
iPhone and iPad line of products, saw its shares tumble 4.8
percent while chip supplier Samsung Electronics fell
1 percent.
 LG Electronics shares fell 2.1 percent,
faltering after a brief spurt of recovery on LG's second quarter
results, which saw its profits double from a year ago though its
handset division swung to a worrying loss. 
 Analysts say South Korean stocks are oversold and unlikely
to post sharp, extended losses from current levels.
 "The price of Korean stocks are nearly on par with book
value right now, and the last time the market was straddling
this level in December, it was followed up by a strong
recovery," said Park Jung-woo, an analyst at SK Securities.
 The battered markets could find relief in the near-horizon
as investors look to the Federal Open Market Committee (FOMC)
and the European Central Bank meetings to provide further
easing.
 
      Move on day                -1.37 percent           
      12-month high   2,192.83   8 July 2011                 
      12-month low    1,644.11   26 Sept 2011                
      Change on yr               -3.09 percent               
      All-time high   2,231.47   27 April 2011               
      All-time low       93.10   6 January 1981   

 (Editing by Sanjeev Miglani)
 

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