Follow the Leader: Seoul Marts Down

Share prices in Seoul retreated to the lowest level in two weeks, hit by the U.S. Nasdaq's 4.2 percent decline overnight on renewed warnings about corporate earnings.

The Nasdaq's weakness was sparked by Sun Microsystems Inc., a U.S. computer hardware maker, which warned that its current quarter's revenue would not meet analysts' expectations. Alcatel, a French telecommunication equipment supplier, also revised downward its earnings outlook for the year. Local technology issues such as Samsung Electronics Co. took a beating from the bleak profit forecasts by their U.S. kin.

The Korea Composite Stock Price Index, or Kospi, was down 16.26 points, or 2.6 percent, to close at 612.16, after spending the whole day in negative territory. As the Nasdaq's losses cooled investor sentiment, trading volume shrank to 385 million shares, compared with 450 million shares Wednesday. Daily turnover stood at 2.3 trillion won ($1.8 billion).

The Kosdaq composite index lost 1.87 points, or 2.2 percent, to 81.35.

On the main Korea Stock Exchange, losers outpaced gainers 533 to 259, with 61 other stocks unchanged. Eight shares plunged by the daily limit of 15 percent, while 17 issues rose by that limit. Weighing down the Kospi, Samsung Electronics slid 5.2 percent to 212,000 won and Hynix Semiconductor Inc. dropped 4 percent to 4,340 won.

"In addition to the Nasdaq's plunge, news that Morgan Stanley Dean Witter downgraded investment grades of major U.S. chipmakers triggered a sell-off in local chipmakers," said an analyst at LG Investment & Securities Co.

Among other technology names, Korea Telecom Corp. eased 3.1 percent to 57,000 won and SK Telecom skidded 1.8 percent to 219,500 won.

Despite the bearish sentiment, pharmaceutical stocks rallied, after Daewoong Pharmaceutical on Wednesday received approval for a new drug that the company said reduces ulcers caused by diabetes. Daewoong jumped 15 percent to 14,200 won. Jeil Pharmaceutical Co., Dongwha Pharmaceutical Industry Co. and Shindongbang Medix also soared by the daily limit.

by Kim Hyun-chul