Market cap of auto, tech stocks dips as Samsung, Hyundai slump

The market value of tech and auto shares has sank this year as market heavyweights in the sectors have been grappling with fierce global competition and unfavorable currency exchange rates, data showed Thursday.

The combined value of information technology and auto shares accounted for 37 percent of the total market capitalization on the main KOSPI market as of Monday, the lowest level since December 2011, according to the data compiled by market researcher WiseFn.

The ratio rose from 41.7 percent at end-2014 to over 45 percent in mid-March, but it has kept sliding over the past four months as Samsung Electronics Co. and Hyundai Motor Co. dragged their respective sectors down.

The weighting of IT stocks fell from 29.2 percent to 27.1 percent, and auto shares shrank from 12.5 percent to 9.9 percent over the cited period.

Shares of Samsung Electronics, the world's largest handset maker, have fallen 6.9 percent from the year-end to 1.23 million won ($1,074) as of Wednesday, and Hyundai Motor, the world's No.

5 automaker together with its sister company Kia Motor, has tumbled 25.2 percent to 126,500 won. The broader market gained 11.1 percent during the same period.

Looking ahead, IT and auto stocks are expected to face a prolonged slump as the outlook for major companies still remains bleak.

Samsung Electronics last week estimated its operating earnings at 6.9 trillion won for the second quarter, down 4 percent from a year earlier, which also fell below the market estimate, due to tougher competition with iPhones by Apple and rising Chinese products.

Hyundai Motor was expected to have posted 1.6 trillion won in operating income in the April-June period, a 22.7 percent decline from a year ago, according to the median estimate. Its overseas sales have slowed as it failed to roll out trend leaders and the weaker Japanese yen against the local currency eroded its price competitiveness.

"As Samsung Electronics and automakers take a significant portion of the national economy and the financial market, their poor performance has raised concerns among investors," said Kim Hyung-ryol, an analyst at Kyobo Securities. (Yonhap)