By Park Hyong-ki
Staff Reporter
Seoul stocks continued to spiral downward on escalating concerns over global financial instability, pushing the benchmark KOSPI to plunge below the psychologically important level of 1,500 during intra-day trading.
The KOSPI market shed 1.93 points, or 0.12 percent, to close at 1,507.40 Wednesday, the lowest close this year. It dropped to as low as 1,488 at one point during the seesaw session.
Meanwhile, the tech-heavy Kosdaq closed down 2.18 points, or 0.42 percent, at 520.84.
Foreign investors continued their net-selling for 28 consecutive trading days, unloading a total of 7.9 trillion won, including the net-selling of over 430 billion won Wednesday.
Analysts say the downfall was in line with overnight losses on Wall Street. The Dow Jones Industrial Average closed below 11,000 for the first time in two years, finishing at 10,962.54, down 0.84 percent.
Despite a decline in oil prices, global investors on Wall Street continued to worry about financial troubles at Fannie Mae and Freddie Mac, the two U.S. mortgage financiers deeply undermined by growing mortgage losses.
Analysts said fresh concerns are being raised as to whether the contagion of the credit crisis could spread to the consumer finance sector.
``Fresh concerns are emerging whether this crisis will hit consumer finance, such as credit card, and further dwarf consumer spending,'' said Kang Moon-sung, an analyst of Korea Investment and Securities.
The analyst expects U.S. financial woes to continue undermining confidence and force foreign investors to sell Seoul shares persistently for the time being. ``Foreign capital is generally moving out of not only Korea but also other emerging markets,'' said Kang.
However, analysts are seeking a sign of hope from the recent fall in oil prices, which could spur investors' sentiment going forward. Light crude oil fell over $6 to $138.74 a barrel on the New York Mercantile Exchange.
Kang said, however, it will only help the market rebound slightly, but the general consensus shows that the market will recover on bargain hunting in the near future.
phk@koreatimes.co.kr