Shares plunge 3.08% on eurozone woes
Korean stocks dived 3.08 percent on Wednesday due to mounting concerns about Greece exiting the eurozone and heighten global economic uncertainties, analysts said. The local currency fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) dropped 58.43 points to 1,840.53, extending its losing streak to six sessions. Trading volume was light at 418 million shares worth 5.48 trillion won ($4.72 billion), with losers clearly outpacing gainers 672 to 192.
"If Greece leaves the eurozone, such a move could have far reaching negative consequences for other European countries such as Italy, Spain and Portugal," said Lee Sang-jae, a senior economist at Hyundai Securities Co.
He said such a development could hurt the U.S. and Chinese economies and spread fears that the global economy may experience hard times in the second half.
Cho Byung-hyun, an analyst at Tongyang Securities Inc., added that the local bourse is responding to external developments which are beyond its control.
He said that because the 17 eurozone members will try to do their best to keep the current situation from deteriorating further, there is a chance that a last minute understanding can be reached to deal with Greece's fiscal debt issue. If this takes place, he expected the KOSPI will be able to hover in the mid 1,800 point range for the time being.
Most shares lost ground with big-cap electronics, auto and steel firms leading the fall.
Market bellwether Samsung Electronics dropped 6.18 percent to 1,230,000 won on rumors that Apple Inc. may buy chips from other suppliers.
Top automaker Hyundai Motor tumbled 3.99 percent to 240,500, with Kia Motors Corp., the country's second-largest automotive company, losing 2.33 percent to 77,600 won.
LG Chem, a leading manufacturer of rechargeable batteries, lost 0.74 percent to 267,000 won, with Hyundai Heavy Industries, the world's largest shipmaker, shed 1.38 percent to 251,000 won.
Top refiner SK Innovation sank 2.52 percent to 135,500 won with state-run power monopoly Korea Electric Power Corp. shedding 0.22 percent to 22,300 won. Leading steelmaker POSCO, also fell 2.23 percent to 372,500 won.
The local currency finished at 1,165.7 won to the U.S. greenback, down a sharp 11.6 won from Tuesday's close, dealers said.
Bond prices, which move inversely to yields, closed mixed. The yield on three-year Treasuries held steady at 3.38 percent, and the return on the benchmark five-year government bonds dipped 0.01 percentage point to 3.49 percent. (Yonhap)