South Korean stocks closed sharply lower Wednesday as investors cashed in profits from recent rallies amid lingering doubt that ongoing global efforts will help prevent financial turmoil from affecting the real economy.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 27.41 points, or 2 percent, to 1,340.28. The decline comes after an advance of around 10 percent over the past two straight sessions. Volume was moderate at 341.89 million shares worth 4.82 trillion won ($3.89 billion), with losers outpacing winners 568 to 261.
"Overnight setbacks in the U.S. set a gloomy tone for local stocks and losses expanded as investors locked in profits from recent sharp advances," Choi Soon-ho, an analyst at Eugene Investment & Securities, was quoted as saying by Yonhap News. "Investors seemed to take a breather after recent market rallies."
Steel and financial issues led the way, wiping out some of their recent gains. Top steel maker POSCO plunged 8.52 percent to 354,500 won and smaller Hyundai Steel shed 6.81 percent to 45,150 won. Hana Financial Group was off 7.59 percent to close at 28,000 won.
Major tech exporters intensified the downward move. Industry heavyweight Samsung Electronics fell 2.32 percent to 547,000 won and flat-panel maker LG Display lost 2.98 percent to 27,650 won. Chipmaker Hynix Semiconductor also dived 4.26 percent to 18,000 won.
Telecom issues, however, bucked the overall market mood, ending in positive territory on an optimistic brokerage report over their third-quarter profit outlooks. No. 1 mobile carrier SK Telecom inched up 0.47 percent to 214,000 won and smaller rival LG Telecom closed up 4.81 percent at 9,800 won.
On Tuesday, U.S. markets ended lower despite a government measure to buy into equities of major banks in its latest move to support the teetering financial system. The Dow Jones industrial average lost 0.82 percent following the previous day's 11.91 percent advance and the tech-dominated Nasdaq composite index fell 3.54 percent.