Seoul Shares Plunge 3.35% on Builder, Auto Setbacks

South Korean stocks plunged 3.35 percent in volatile trading Monday, dragged down by sell-offs in construction and auto shares on deepening recession woes. The local currency fell to a 10-year low against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) was down 33.59 points to 970.14 after drifting in and out of positive territory in early trading. The index fell below the 1,000-point level again following a 5.8 percent surge Friday.

Volume was heavy at 458.78 million shares worth 4.7 trillion won ($3.1 billion), with losers outnumbering gainers 594 to 230.

"Despite a strong start thanks to Wall Street rallies in the previous session, jitters set in again over a possible economic slowdown, sparking sell-offs across the board," Lee Sun-yup, an analyst at Goodmorning Shinhan Securities, was quoted as saying.

Most shares closed sharply lower, with builders and auto shares severely rattled. With rumors spreading that the construction sector might face restructuring, Daewoo Engineering & Construction, the country's No. 1 builder, dropped 5.66 percent to 7,500 won.

Hyundai Engineering & Construction, the nation's No.2 player, also plunged 8.37 percent to close at 10,400 won, extending losses after news reports that its parent group might be forced to shut down its North Korean tourism and other inter-Korean operations.

Auto shares lost significant ground on concerns that a possible collapse of struggling U.S. carmaking giants including GM bodes ill for local automakers as well. Industry leader Hyundai Motor dived 12.85 percent to 40,000 won, while its affiliate Kia Motors fell by its near daily limit of 14.85 percent to 6,710 won.

The tech-loaded Kosdaq market also fell 1.94 percent to close at 284.50 on institutional selling.

The local currency closed down 18 won at 1,513 won versus the greenback on stock market setbacks. The won finished below the 1,500-won level for the first time since March 13, 1998.