7.28.2011

Tech sends Seoul shares higher after Apple results

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* Techs rally after Apple results offer both hope and concern

* Auto, steel, bank issues firm; shipbuilders lose ground

* Hyundai Heavy down ahead of earnings report (Updates to mid-morning)

SEOUL, July 20 (Reuters) - Seoul shares were poised to snap a two-session loss on Wednesday on eased U.S. debt jitters, led by tech shares after Apple Inc. announced forecast-crushing quarterly results.

"Uncertainty has dissipated about U.S. debt problems, while good earnings are being reflected," Lee Seon-yeob, an analyst at Shinhan Investment Corp said.

U.S. stocks recorded their best day since March on Tuesday after strong corporate results and renewed hope for an agreement in Washington on thorny budget issues boosted investor confidence. Groundbreaking for U.S. homes scaled a six-month high in June.

"But foreigners are still hesitating to buy Seoul shares," Lee said.

The Korea Composite Stock Price Index (KOSPI) rose 1.05 percent to 2,152.67 points as of 0300 GMT.

Investors snapped up battered tech shares after Apple's staggering earnings triggered expectations of higher demand for components and offered a glimmer of hope for the battered tech sector.

Shares in chipmaker Samsung Electronics gained 3.8 percent, while display maker LG Display jumped 6.2 percent and battery producer Samsung SDI rose 6.1 percent.

"Tech shares are rising after their recent sharp falls and on expectations that their earnings may not be as bad as previously concerned," Lee said.

But the euphoria may be short-lived since the outlook for the tech sector is clouded by macroeconomic concerns and because Apple is emerging as a bigger threat to Korean handset makers.

"The key is whether Intel Corp's earnings to be released tomorrow morning boost tech shares... Apple's strong results mean that it is difficult for Samsung to beat Apple," said Lee Sang-jae, an analyst at Hyundai Securities.

Auto, steel and bank issues gained ground across the board.

Hyundai Motor gained 0.9 percent, while POSCO advanced 2.6 percent and KB Financial Group climbed 2.5 percent

Shares in SK Telecom rose 1.1 percent, outperforming telecom peers after the country's top mobile operator announced a buyback plan for 201.6 billion won ($190.3 million) worth of shares.

Shares in shipbuilders lost ground, with Hyundai Heavy Industries slumping 3.4 percent and Daewoo Shipbuilding and Marine Engineering sliding 3.4 percent. (Reporting by Hyunjoo Jin; Editing by Ken Wills)

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