Shares Hit Hard; Kospi Under 500

A sell-off by foreign investors after the U.S. Nasdaq market's slump and the Korean won's sharp drop battered Seoul stocks Wednesday, defying the government's plans to boost the stock market. The Korea Composite Stock Price Index ended below the 500-point mark for the first time in about two years.

The main market started bearish after the Nasdaq composite index tumbled overnight 6.2 percent to its lowest level in 29 months. The Kospi index rebounded at one point in the morning when the government unveiled measures to bolster the markets, including more state-run funds' investments in stocks.

But the composite index resumed its plunge, closing at 493.69, down 9.57 points or 1.9 percent. "The government's announcement did little for sentiment because a number of investors have begun to think that the recent bear market results from structural problems," said an analyst at Daewoo Securities.

Foreign investors sold 177.3 billion won ($129.9 million) in shares, the largest amount since Dec. 1, on concern that the won's sharp decline would cause the value of their investments to drop. The exchange rate closed Wednesday at 1,365.2 won per dollar, up from 1343.7 won Tuesday.

Trade volume was 314 million shares, valued at 1.46 trillion won. Declining issues led advancers 595 to 218. Thirty shares fell by the daily limit of 15 percent and 17 issues rose by that limit.

Key blue chips led the bear market. Samsung Electronics lost 3.68 percent, ending at 183,000 won. Hyundai Electronics Industries plunged 5.80 Percent to 2,760 won. Korea Electric Power Corp. declined 2.11 percent to 18,600 won.

The Kosdaq market also fell for the seventh consecutive trading session. The composite index lost 1.90 points, ending at 64.34.

Most leading telecommunication and dot-com shares retreated, but LG TeleCom soared by the daily limit of 12 percent on the expectation that it will bid for a next-generation wireless business license. Thirty-five issues fell by the daily limit, while 10 shares touched the ceiling. Losing issues overwhelmed gainers 459 to 107.

by Moon So-young