South Korean stocks declined to their lowest point in five weeks Wednesday on fears of a possible financial jolt in Asian emerging countries, analysts said. The local currency rose against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 20.39 points, or 1.08 percent, to close at 1,867.46, the lowest mark since July 16. Trading volume was moderate at 406.3 million shares worth 4.24 trillion won (US$3.79 billion) with losers far outnumbering gainers 645 to 168.
"Sharp falls in Asian stock markets had a direct impact on the Seoul bourse. They brought back the trauma of the 1997 crisis when there was a massive outflow of foreign funds," said Park Choong-seop, an analyst at Daishin Securities Co.
As fear of a U.S. stimulus cut resurfaced, along with worsening economic data in Southeast Asia, the Thai market tumbled around 3 percent on Monday and Tuesday. The Indonesian benchmark plunged more than 5 percent over the past two sessions with its currency hitting a four-year low.
A slowdown in emerging countries bodes ill for Korean exporters, weighing down their profitability, Park said. Asian emerging markets, as a region, are a major trading partner for Korea after China.
Foreigners snapped a five-day buying spree and dumped local equities worth a net 145.9 billion won. Retail and institutional investors bought a combined net 148.3 billion won on the main bourse.
Large caps lost ground across the board. Samsung Electronics sank 1.02 percent to 1,256,000 won, with Hyundai Motor falling 0.22 percent to 228,500 won.
Financial blue-chip Shinhan Financial dipped 2.21 percent to 39,800 won and state-run electricity provider Korea Electric Power Corp. closed down 2.88 percent at 28,650 won.
In contrast, Kia Motors, a smaller affiliate of Hyundai Motor, jumped 2.11 percent to 63,000 won and Samsung Life Insurance jumped 1.44 percent.
The local currency ended at 1,117.40 won against the greenback, up 3.4 won from Tuesday's close, mainly due to a weaker dollar, dealers said. (Yonhap News)
