Chip Gloom Pulls Market Down 2.5%

Concerns about Wall Street overwhelmed the effects of this week's stock buying by the government pension fund and Thursday's interest rate cut by the Bank of Korea. Stocks fell in Seoul below the 580-point level for the first time in seven weeks.

Foreign investors sold both on the spot and futures markets after Wall Street dropped overnight on a series of new profit warnings from the U.S. retail and high-tech sectors. The Korea Composite Stock Price Index closed at 578.54, down 15.07 points, or 2.5 percent.

"Since the National Pension Corp.'s buying has not buoyed the stock market, investors are unloading more shares in disappointment," an analyst at Daishin Securities Co. said.

Index-leading chipmakers were especially weak after earnings warnings from U.S.-based Advanced Micro Devices Inc., a rival of Intel Corp. Foreign investors fled from Samsung Electronics, sending the chipmaker plunging 4.9 percent to 183,500 won ($141), the lowest in nearly three months. Hynix Semiconductor tumbled 6.7 percent, finishing at 2,315 won.

Leading the day's losses, most core blue chips fell. SK Telecom declined 1.8 percent to 196,500 won. Korea Telecom shed 2.4 percent, ending at 52,400 won. Pohang Iron & Steel Co. was down 2.4 percent to 101,500 won. Korea Electric Power Corp. slid 2.1 percent to 23,200 won.

Losing issues overwhelmed gainers 621 to 190. Sixteen shares rose 15 percent, the daily limit, and nine hit the down limit. Trade volume was up slightly, to 216 million shares. The daily turnover was 1.14 trillion won.

The Kosdaq market also ended lower on the U.S. Nasdaq market's overnight losses. The composite index shed 2.64 points, or 3.4 percent, to close at 74.08.

Trade volume fell to 290 million shares with a value of 1.19 trillion won. Declining issues overwhelmed advancers 501 to 97. Seven shares fell by the daily limit of 12 percent and five rose by that limit.

Leading telecommunication stocks were especially weak. Korea Telecom Freetel lost 3.2 percent. LG TeleCom plunged 4.9 percent. Hanaro Telecom tumbled 7.6 percent.

by Moon So-young