Stocks Begin 2008 in Bearish Mood

By Park Hyong-ki

Staff Reporter

The stock market opened weakly on its first trading session this year, losing steam on heavy sell-offs.

Analysts say weak futures have triggered heavy programmed selling by institutional investors, adding downward pressure on Seoul stocks.

The benchmark KOSPI index closed down 43.68 points, or 2.3 percent, at 1,853.45, while the tech-heavy Kosdaq market edged up 2.89 points, or 0.41 percent, to 707.12.

``Seoul stocks plunged on heavy programmed selling,'' said Kim Joong-hyun, an analyst at Goodmorning Shinhan Securities.

Institutional investors unloaded shares on the main bourse worth 456 billion won.

As many analysts had predicted last month, foreign investors turned to buying, purchasing shares worth about 83 billion won.

The fall is aligned with a steep fall on Wall Street where the Dow Jones Industrial Average plunged 101.05, or 0.76 percent, to 13,264.82, and the Nasdaq shed 22.18, or 0.83 percent, to 2,652.28 Monday.

Analysts said although the stock market is expected to head for ``modest growth'' throughout this year, variables will remain that can make Seoul stocks decline.

They lowered their expectations for this year, as uncertainties loom over the U.S. economy stemming from the subprime lending turmoil.

Mirae Asset Securities analyst Jung Seung-jae said expectations of fourth-quarter earnings from corporations are not enough boost to the stock market, even though their fundamentals are healthy.

``The U.S. economic uncertainty is overshadowing Korea's sound fundamentals,'' said Jung.

He said that upcoming retail sales and employment data in the U.S. will likely direct the course of Asian markets going forward.

As the U.S. is one of the top destinations for Korean exports, analysts say the stock market cannot be de-linked from its economic activities as exports are the country's main growth engine.

Tech-heavy weight Samsung Electronics closed down 12,000 won, or 2.15 percent, at 544,000 won; POSCO shares ended down 13,000 won, or 2.26 percent, at 562,000 won; and Hyundai Heavy Industries shares shed 7,500 won, or 1.69 percent, to close at 435,000 won.

phk@koreatimes.co.kr