(LEAD) Seoul shares hit 2-month high on Samsung earnings boost

(ATTN: RECASTS headline; CORRECTS Samsung's market cap portion in 4th para; ADDS bond yields at bottom)

SEOUL, Oct. 7 (Yonhap) -- South Korean stocks jumped to a two-month high on Wednesday, driven by a surge in top-cap Samsung Electronics Co. shares, after it announced forecast-beating quarterly earnings, analysts said. The local currency gained against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) advanced 15.19 points, or 0.76 percent, to close at 2,005.84. It is the highest level since Aug. 10, which also marks a rebound to above the psychologically-significant 2,000-point mark for the first time in two months.

Trading volume was heavy at 749.5 million shares worth 6.1 trillion won (US$5.23 billion). But decliners outpaced gainers 471 to 335.

Before the market opened, Samsung Electronics, which accounts for about 14 percent of the total market capitalization on the main bourse, said it estimated 7.3 trillion won for the third-quarter operating income in its earnings preview, far beating the market estimate of 6.9 trillion won.

The unexpected on-year gain pushed its shares up by 8.69 percent to end at 1,251,000 won, sending the benchmark index higher.

"Samsung's strong performance is a positive factor which will help investors dispel concerns hanging over dim corporate earnings outlook here," said Lee Jun-hee, an analyst at NH Investment & Securities Co.

But, it's not enough to trigger an upward momentum for the KOSPI, he said, since many firms are expected to report gloomy third-quarter results, in line with market estimates that have been revised down amid a global slowdown.

"Uncertainties do remain as worries about China and a U.S. rate hike continue to weigh down the market," Lee added.

Analysts said there needs to be a clear sign of a foreign capital inflow to get a fresh boost. Offshore investors scooped up a net 88.4 billion won, with institutions buying a net 89.1 billion won. Individuals sold off a net 213.1 billion won.

Global chipmaker SK hynix gained 0.27 percent to finish at 37,300 won.

Hyundai Motor, the country's top automaker, spiked 1.58 percent to end at 160,500 won and its affiliate, Kia Motors, advanced 1.38 percent to close at 51,500 won.

In contrast, foodmakers and pharmaceutical companies finished in negative territory. Leading food manufacturer Ottogi plunged 9.03 percent to 1,028,000 won and drug maker Hanmi Pharm slumped 5.91 percent to 350,000 won.

The local currency ended at 1,161.30 won against the greenback, up 4.6 won from Tuesday's close, mainly due to the KOSPI's gain, dealers said.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys added 2.3 basis points to 1.614 percent and the return on the benchmark five-year government bonds rose 4 basis points to 1.778 percent.

elly@yna.co.kr
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