South Korean shares fall on caution ahead of Samsung Electronics' earnings

South Korean shares declined on Wednesday as investors remained cautious before Samsung Electronics announced its earnings. The KOSPI index dropped by 43.20 points, or 0.62%, reaching 6,898.19. Samsung Electronics, a key player in the market, experienced a slight gain of 0.18%, following a more than 2% rise earlier in the day. Meanwhile, SK Hynix, another competitor, saw a decline of 1.52%.

Analysts anticipate Samsung Electronics to report a significant increase in third-quarter operating profit, largely attributed to the surge in AI demand. However, forecasting analysts have reduced their estimates by nearly 8% since late August. Han Ji-young, a securities analyst, noted that domestic market gains will be limited by cautious sentiment ahead of Samsung's earnings and a holiday later in the week.

Foreign investors were net sellers, with shares worth 865.3 billion won being offloaded. The Korean won was slightly stronger than the previous session at 1,338.3 per dollar. Treasury bond futures on three-year bonds decreased by 0.01 point to 102.62, and the three-year yield rose by 1.4 basis points to 3.949%, while the 10-year yield increased by 1.1 basis points to 4.384%.