By Yoon Ja-young
Staff Reporter
Seoul stock exchanges plunged Tuesday, following an overnight fall on Wall Street. The main index KOSPI closed at 1,541.41, falling 26.3 points, or 1.68 percent, from the previous day.
With the Chinese stock market losing steam on a projected post-Olympic economic slowdown, China-related stocks are joining financial stocks in falling, leaving the stock market without a pillar to sustain it.
The KOSPI opened the day at 1,550, but fell by over 20 points in the morning session, once dropping to 1528.31, due to the overnight performance on Wall Street.
Shares of mortgage financiers Fannie Mae and Freddie Mac fell sharply amid fears over the government intervening to bail out the two. Fannie Mae shed over 22 percent, and Freddie Mac lost almost 25 percent.
Buying by small and institutional investors helped the index gain in the afternoon session. Foreigners, meanwhile, sold 370.3 billion won worth of shares, the biggest sell off since Aug. 5.
The junior, tech-heavy Kosdaq fell 9.23 points, or 1.79 percent, to close at 507.81, the lowest level so far this year. The number of stocks falling their daily limit totaled 26.
All industry sectors fell in Tuesday trading. Banks, securities and insurance firms continued to be sluggish due to renewed capital market woes. Stocks of securities companies fell by over three percent on average. HMC Investment and Securities fell six percent, and Kyobo and Yuhwa lost over five percent.
Shipbuilding, steel, and machinery, which helped the KOSPI break 2,000 last year, also lost steam due to the poor Chinese market despite the opening of the Olympics.
The Chinese bourse, however, succeeded in rebounding thanks to earning surprises announced by major banks.
Japan's Nikkei lost 2.28 percent, and Hong Kong and Taiwan also fell due to the gloomy news from Wall Street.