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Seoul shares drop 2.64 pct on recession fears
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South Korean stocks closed 2.64 percent lower on Monday as lingering fears over
a global economic recession prompted foreigners and retail investors to flee for
safer assets, analysts said. The local currency plunged to a 13-month low
against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) slumped 44.73 points to 1,652.71, extending its losing streak to a third session. Trading volume was moderate at 419.1 million shares worth 7.28 trillion won (US$6.13 billion), with losers far outnumbering gainers 794 to 89.
"Despite ongoing moves to prop up the global economy, investor appetite for safer assets is increasing on belief those policy efforts may not be fundamental solutions," said Han Chi-hwan, an analyst at Daewoo Securities Co.
"Moreover, a rebound seems more tough given the already weak market sentiment," said Han.
Others said the weakening Korean won is weighing down on the benchmark index, pointing out that foreigners who had bet on the won's strength may opt to sell amid the local currency's slide.
"The government is trying to defend the won, but since the foreign capital exit is continuing, it is likely to become a tough fight," said Lee Sang-won of Hyundai Securities Co., adding it is difficult to forecast when the KOSPI will reach its bottom.
Exporters largely lost ground on fears a global economic recession would erode their profitability.
Top shipyard Hyundai Heavy Industries dived 10.9 percent to 237,000 won and leading steelmaker POSCO slipped 0.97 percent to 358,500 won. Oil refiner heavyweights also ended on negative territory with industry leader SK Innovation losing 7.61 percent to 133,500 won.
Korea Zinc, the world's second-largest zinc smelter, plummeted by its daily limit of 14.96 percent to 290,000 won on a slump in gold prices.
Shipping line Hanjin Shipping also plunged by the daily limit for the second straight session to close at 11,650 won after announcing a share sale plan.
In contrast, market bellwether Samsung Electronics gained 2.24 percent to 775,000 won.
Domestic-focused companies such as top mobile carrier SK Telecom also fared well, climbing 5.42 percent to 155,500 won.
The local currency closed at 1,195.8 won against the greenback, down 29.8 won from Friday's close and the lowest since 1,198.1 won on Aug. 31, 2010, amid growing investor appetite for safer assets, dealers said.
Date
2011.09.26
The benchmark Korea Composite Stock Price Index (KOSPI) slumped 44.73 points to 1,652.71, extending its losing streak to a third session. Trading volume was moderate at 419.1 million shares worth 7.28 trillion won (US$6.13 billion), with losers far outnumbering gainers 794 to 89.
"Despite ongoing moves to prop up the global economy, investor appetite for safer assets is increasing on belief those policy efforts may not be fundamental solutions," said Han Chi-hwan, an analyst at Daewoo Securities Co.
"Moreover, a rebound seems more tough given the already weak market sentiment," said Han.
Others said the weakening Korean won is weighing down on the benchmark index, pointing out that foreigners who had bet on the won's strength may opt to sell amid the local currency's slide.
"The government is trying to defend the won, but since the foreign capital exit is continuing, it is likely to become a tough fight," said Lee Sang-won of Hyundai Securities Co., adding it is difficult to forecast when the KOSPI will reach its bottom.
Exporters largely lost ground on fears a global economic recession would erode their profitability.
Top shipyard Hyundai Heavy Industries dived 10.9 percent to 237,000 won and leading steelmaker POSCO slipped 0.97 percent to 358,500 won. Oil refiner heavyweights also ended on negative territory with industry leader SK Innovation losing 7.61 percent to 133,500 won.
Korea Zinc, the world's second-largest zinc smelter, plummeted by its daily limit of 14.96 percent to 290,000 won on a slump in gold prices.
Shipping line Hanjin Shipping also plunged by the daily limit for the second straight session to close at 11,650 won after announcing a share sale plan.
In contrast, market bellwether Samsung Electronics gained 2.24 percent to 775,000 won.
Domestic-focused companies such as top mobile carrier SK Telecom also fared well, climbing 5.42 percent to 155,500 won.
The local currency closed at 1,195.8 won against the greenback, down 29.8 won from Friday's close and the lowest since 1,198.1 won on Aug. 31, 2010, amid growing investor appetite for safer assets, dealers said.
Source: Yonhap News (Sept. 26, 2011)