By Park Hyong-ki
Staff Reporter
Seoul stocks took a big plunge Monday with the KOSPI market posting the biggest fall this year as it dipped below the 1,700-mark on concerns over the faltering U.S. economy.
The benchmark KOSPI shed 51.16 points, or 2.95 percent, at 1,683.56, and the tech-heavy Kosdaq market closed down 14.45, or 2.17 percent, at 651.87.
Analysts say an overnight loss on Wall Street froze general sentiment on the main bourse with global investors driven by concerns over a possible ratings cut of MBIA and Ambac Financial Group, two biggest bond insurers in the United States.
The two companies are under consideration for a ratings cut by agencies such as Moody's Investors Service and Standard & Poor's due to bad investments in subprime-linked mortgage securities. Fitch Ratings downgraded Ambac's AAA rating to AA.
Also, global investors were not relieved by a U.S. stimulus plan, aimed at saving the nation's economy. The Dow Jones Industrial Average dropped 59.91, or 0.49 percent, to 12,099.30, while the S&P500 closed down 8.06, or 0.60 percent, at 1,325.19.
``The possible ratings cut has heightened concerns about U.S. subprime defaults, further fueling a selling spree by foreign and institutional investors,'' said Choi Chang-kyu, an analyst at Woori Investment & Securities.
Foreign investors on the main bourse unloaded shares worth over 380 billon won, and institutional investors sold some 16 billion won worth of shares. Retail investors remained as the only buyer, purchasing shares about 300 billion won.
With the heavy loss, market capitalization of the KOSPI and the Kosdaq markets recorded 939 trillion won, down 112 trillion won from the end of last year.
Tech-heavyweight Samsung Electronics shares closed down 3,000 won, or 0.52 percent, at 564,000 won. POSCO shares shed 5,500 won, or 1.11 percent, at 489,500 won, and Hyundai Heavy Industries shares fell 20,500 won, or 5.76 percent, at 335,000 won.
phk@koreatimes.co.kr