Shares drop 0.77% on mounting eurozone woes
Korean stocks sank 0.77 percent on Tuesday due to mounting European fiscal uncertainties that can destabilize the global economy, analysts said. The local currency fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) gave up 14.77 points to 1,898.96, extending its losing streak to five sessions. Trading volume was moderate at 510 million shares worth 5.10 trillion won ($4.41 billion), with losers clearly outpacing gainers 616 to 225.
"The drop in the bourse is directly linked to growing concerns that Greece may exit the eurozone over its debt problems and other negative data indicating problems facing Europe's economy" said Song Jae-hak, an analyst at Woori Investment & Securities Co.
He said because there is little the KOSPI can do to offset such concerns, there is a risk that local prices may fall further during the week.
Others said that the decision by Moody's Investor Service to downgrade 26 Italian banks fueled concerns and contributed to the drop in share prices.
Reflecting this, Cho Yoon-nam, a strategist at Daishin Securities Research Center, said it is impossible to tell how far the market will fall at present, although he predicted there may be a technical rebound if the index falls below the 1,850 mark.
Shares retreated across the board, although a few big caps in autos and steel pulled off modest gains or managed not to lose ground.
Market bellwether Samsung Electronics, lost 0.23 percent to 1,311,000 won with LG Chem, a leading manufacturer of rechargeable batteries, dropping 2 percent to 269,000 won.
Hyundai Heavy Industries, the world's largest shipmaker, shed 1.35 percent to 256,500 won, while SK Innovation, Korea's No. 1 refiner, surrendering 2.80 percent to 139,000 won. State-run power monopoly Korea Electric Power Corp. dropped 2.83 percent to 22,350 won.
Top automaker Hyundai Motor and leading steelmaker POSCO, however, remained unchanged at 250,000 won and 381,000 won, respectively. Kia Motors Corp., Hyundai's affiliate and the country's second-largest automotive company, gained 0.62 percent to 80,800 won.
The local currency finished at 1,154.1 won to the U.S. greenback, down 4.9 won from Monday's close, dealers said.
Bond prices, which move inversely to yields, remained flat. The yield on three-year Treasuries stood unchanged at 3.38 percent, and the return on the benchmark five-year government bonds held steady at 3.50 percent. (Yonhap)