Growing uncertainty from external factors further undermined South Korean stocks Thursday, pulling down its main index below 1,920 amid continued net-selling by foreign investors.

The KOSPI lost 1.28 percent, or 24.83 points, to close at 1,914.55. It recorded its lowest mark in seven months since the benchmark index dipped to 1,902.62 on Jan. 19.

Foreign investors dumped equities worth 294.5 billion won ($248.5 million), maintaining their net-seller stance for the 11th consecutive day of trading. Institutional and small investors net bought 289.8 billion won worth and 38.3 billion won worth of shares, respectively.

From Aug. 5 to Aug. 20, foreign investors offloaded about 1.47 trillion won on the nation’s main bourse. Analysts picked China’s economic slowdown and the weakening Korean currency against the greenback as two negative factors behind the selloff.

“Foreigners usually invest in Korea with their dollar-denominated assets. It seems that they are wary of a heavy drop in their stock value due to the U.S. dollar’s recent gains versus the Korean won,” a research analyst on TV said.

But he added that this also means -- vice versa - foreign investors could enjoy the opportunity of purchasing Korean shares at cheaper prices.

Park Young-ho, the chief of Park’s Securities Academy, downplayed the recent synchronization of Seoul and Shanghai indexes. “Past cases do not show that Korean stock prices have generally coincided with a bullish or bearish market in China. I don’t think the crash of Chinese shares (even if it continues) would have a chain effect on Korea for a longer period.”

The KOSDAQ, which mostly trades equities of small and mid-sized firms, fell by 2.06 percent, or 13.84 points, to close at 656.71. It was the lowest in more than four months after the secondary index stood at 650.57 on April 2.

As the July-August minutes of the U.S. Federal Open Market Committee, unveiled earlier in the day, hinted at a dovish stance toward its coming monetary policy, the dollar inched down 0.2 won from a session before to close at 1,185.1 won.

Some market participants had predicted the Federal Reserve could take a quicker-than-expected tighter position to advance its timing of an interest rate hike to as early as next month.

Since China embarked on the devaluation of its currency on Aug. 11, the KOSDAQ posted the sharpest drop among the world’s major bourses.

After reaching 746.34 on Aug. 10, a day before the yuan’s depreciation, the KOSDAQ lost 10.1 percent over the past six trading sessions between Aug. 11 and Aug. 19 to close at 670.55 on Wednesday.

Its bearish position exceeded that of other Asian countries whose degree of dependence on trade with China is also high. Chinese Taipei and Singapore saw stock index drops of 5 percent and 4.9 percent, respectively, over the corresponding period.

Peru recorded a 7.9 percent fall in its stock index, followed by Indonesia with 6 percent, Luxembourg with 5.7 percent, Germany with 5 percent, Malaysia with 4.9 percent and Vietnam with 3.9 percent.

While the index drop of countries such as the U.K., Russia, Spain, Japan, Mexico and Chile ranged between 1 and 3 percent, the U.S. Nasdaq climbed 0.3 percent, Portugal had a 0.1 percent increase and Denmark a 1.5 percent increase.

Korea’s economic policymakers have decided to enhance their monitoring of the stock and currency market, casting worries over the expanded external volatility.

In his report to the National Assembly on Thursday, Deputy Prime Minister and Finance Minister Choi Kyung-hwan said that “the devalued yuan is widening the uncertainty of the global economy as (China’s policy) is triggering instability in emerging markets, including some Asian countries.”

The yuan depreciation is also causing possible competition among some countries to lower their currency values, he added.

“It brought about the volatility of (Korea’s) stock and foreign exchange markets,” he said. “And it is building a considerable burden for the domestic economy due to the weakness of the nation’s export items, which compete with Chinese products.”

He added that the government was mapping out comprehensive countermeasures, which would be applicable to a variety of scenarios.

By Kim Yon-se (kys@heraldcorp.com)