By Kim Tae-gyu
Staff Reporter

The local currency wrapped up its week-long upward trend Wednesday by falling against the dollar following tumbling stock prices in both the United States and Korea.

The Korean won declined by 31.5 won to close at 1,239.5 won per dollar on the weak stock markets wiping out Tuesday's 30 won rise.

Since last Thursday, the Korean won has gained 187 won against the greenback during four trading sessions after huge depreciation earlier last week.

``The slumping U.S. stock prices caused the Korean stock prices and its currency to drop,'' Meritz Securities investment strategy researcher Shim Jae-yeop said.

The benchmark KOSPI shed 27.41 points, or 2 percent, to close at 1,340.28 while the junior Kosdaq edged down 6.04 points, or 1.52 percent, to 390.28. Both indices gained more than six percent in the previous session.

These tracked the overnight movement of the Down Jones industrial average, which lost 0.82 percent following Monday's 11.91 percent surge. The tech-heavy Nasdaq composite index dipped 3.54 percent.

``Investors both in the U.S. and here seemed to be cashing out after Tuesday's rally. Plus, worries still linger on whether the global bailout plan will work out,'' Samsung Securities analyst Kim Seon-bong said.

``Hence, these kinds of fluctuations are inevitable for the time being, although I expect a moderate rise for local stock prices and the Korean won,'' Kim said.

Many blue chips on the KOSPI struggled, with the world's top memory chipmaker Samsung Electronics leading the way by shedding 2.32 percent to close at 547,000 won.

Steel maker POSCO dropped 8.52 percent to 354,500 on concerns that the ongoing financial crisis will reduce demand for steel during the final quarter of the year. Along the same lines, minnow player Hyundai Steel also dived 6.81 percent to 45,150 won.

A total of 341.88 million shares changed hands, worth 4.8 trillion won. Losers outnumbered winners 585 to 257.

voc200@koreatimes.co.kr