South Korean stocks dropped 1.42 percent Monday on concerns that rising oil prices may hurt the South Korean economy and corporate earnings, analysts said. The local currency fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index lost 28.73 points to end at 1,991.16. Trading volume was moderate at 629 million shares worth 5.48 trillion won ($4.85 billion) with decliners leading gainers 570 to 275.
“Rising oil prices could be a big burden to the local economy and hurt corporate earnings,” said Kwon Kyu-baek, an analyst at Etrade Securities. “Investors are worrying that the rising trend could last,” he said.
Oil prices have been on the rise, mostly driven by tensions between Iran and Western countries, and spiking demand from such emerging countries as China and India. Dubai crude oil, South Korea’s benchmark, finished at $121.57 per barrel on Friday, up $1.35 from the previous day and rising for a third straight day.
Analysts said exporters led the decline on concerns that they are feared to lose competitiveness in overseas markets as the Japanese yen hit a nine-month low against the U.S. dollar.
Tech behemoth Samsung Electronics declined 0.76 percent to close at 1,171,000 won, and Hynix Semiconductor tumbled 3.12 percent to 27,950 won.
Hyundai Motor, the country’s leading automaker, also sank 3 percent to close at 210,000 won and its smaller affiliate Kia Motors slumped 3.14 percent to 67,900 won.
Himart, a local home appliance retailer, dropped by the daily limit of 15 percent to close at 64,000 won on news that its executives are being investigated by prosecutors for tax evasion.
Rising oil prices also forced investors to unload local refiners. SK Innovation, the country’s leading refiner, lost 3.15 percent to 184,500 won, and S-Oil, the country’s third largest refiner, shed 4.92 percent to 125,500 won.
Petrochemical firms also declined with LG Chem, the country’s leading chemicals maker, sliding 4.07 percent to 389,000 won.
The local currency closed at 1,129.1 won to the greenback, down 3.3 won from Friday’s close, as overseas investors offloaded the local currency amid increased market volatility, dealers said. (Yonhap News)
