South Korean stocks plunged 2.93 percent Thursday as investors were spooked by continued setbacks in the global market and growing geopolitical tensions following the North's rocket launch. The local currency fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) dropped 56.25 points to end at 1,861.54. Trading volume was moderate at 381.07 million shares worth 4.64 trillion won ($3.86 billion), with decliners far outpacing gainers 767 to 92.


"All the global market turmoil that took place during the holiday seemed to be factored in altogether, with foreigners leading the slide by dumping shares on a large scale," said Lee Kyung-min, an analyst from Daishin Securities Co. The recent market rout in Japan was belatedly reflected in Korean stocks, which started its first trading of the week sharply lower following the Lunar New Year holiday.

Following an over 7 percent slide in the previous two days, Japan's Nikkei 225 also traded about 2 percent lower. Other Asian markets lost ground Thursday, including the Hang Seng index, which tumbled over 5 percent at one point.

The downswings aggravated the market mood already hurt by North Korea's recent launch of a long-range rocket that is ramping up tensions on the Korean Peninsula.

Foreigners weighed on the market by selling a net 174 billion won worth of shares, with retailers and institutional investors buying more shares than they sold.

Most major shares ended in negative terrain. Market bellwether Samsung Electronics dropped 2.92 percent to 1,130,000 won. No. 1 Internet portal operator dived 6.01 percent to 563,000 won, and chipmaker SK hynix fell 3.38 percent to 27,150 won.

Financial issues, including banks and brokerages, ended bearish. Samsung Securities plunged 6.41 percent to 35,750 won.

Cosmetics maker AmorePacific ended down 2.24 percent at 393,500 won, while steelmaking giant POSCO shed 2.49 percent to 176,500 won.

The local currency closed at 1,202.5 won against the greenback, down 5.1 won from the previous trading day.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys dropped 5.6 basis points to 1.450 percent while the return on the benchmark five-year government bonds fell 8.7 basis points to 1.539 percent. (Yonhap)