Shares End Sharply Lower
South Korean stocks closed sharply lower Monday as foreign investors pulled money out of local stocks following losses in U.S. markets, analysts said. The South Korean won fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) plunged 21.75 points, or 1.16 percent, to 1,855.05. Volume was moderate at 320.5 million shares worth 4.99 trillion won ($5.4 billion), with losers outnumbering winners 545 to 245.
"Investor sentiment was dented by Wall Street losses. The foreign investors' selling spree is likely to continue until concerns over U.S. subprime mortgage defaults subside," said Kim
Hak-kyun, an analyst at Korea Investment & Securities.
Renewed worries about the default risks of subprime loans, which are given to people with poor credit, have raised concerns over a possible credit crunch in global financial markets.
Tech bellwether Samsung Electronics shed 1.02 percent to 584,000 won after some of its chip production lines were shut down on Friday by a power outage. But chip giant Hynix Semiconductor gained 0.67 percent to 37,350 won, benefiting from the news about its rival Samsung Electronics.
Financial shares ended in negative territory on weaker-than-expected earnings and worries over the U.S. mortgage market.
Top lender Kookmin Bank declined 2.25 percent to 74,000 won and No. 2 financial services company Shinhan Financial Group fell 1.15 percent to 60,000 won.
No. 2 credit card company Samsung Card slid into negative territory, falling 0.16 percent to 61,700 won despite its strong second-quarter earnings.
Top steelmaker POSCO shed 3.42 percent to 508,000 won and leading carmaker Hyundai Motor fell 1.92 percent to 76,500 won.
U.S. stocks closed sharply lower on Friday due to concerns about a possible credit crunch. The Dow Jones industrial average shed 2.09 percent and the Nasdaq composite index fell 2.51 percent.
The local currency finished at 923.4 won to the U.S. dollar, down 0.5 won from Friday's close, as offshore investors bought the greenback, dealers said.