Wall Street credit woes cause big global sell-off
Seoul stock markets suffered a downturn unseen for months after rising concern over subprime mortgages in the United States sent American stock markets down on Thursday, spurring a big sell-off by investors worldwide.Korea’s benchmark Kospi nosedived 80.32 points, or 4.1 percent, to end at 1,883.22 yesterday after selling by foreign investors.
Market bellwether Samsung Electronics dropped 4.8 percent to close at 596,000 won ($647). Kookmin Bank, Korea’s largest lender, dropped 3.7 percent and Hyundai Motor, the top automaker, shed 1.2 percent. SK Telecom slid 3.7 percent and Hynix Semiconductor declined 2.8 percent.
On Thursday the Dow Jones Industrial Average recorded its biggest daily loss since February after it was announced that sales of new homes in the U.S. tumbled in June by the largest amount in five months. Worse still, Leah Rhodes, a director at Standard & Poor’s, said the losses in the U.S. sub-prime mortgage market “exceeded our expectations.”
Park Hyo-jin, an analyst at Goodmorning Shinhan Securities said the biggest problem of the local markets is the speed of the latest gain on the Seoul stock markets. “There is a big risk in long-term upward momentum unless its speed is controlled.”
Shares of stockbrokers took a dive as Daewoo Securities dropped 6.7 percent and Mirae Asset Securities fell by 7.8 percent. Shares of Kyobo Securities jumped 10.9 percent amid speculation the Industrial Bank of Korea plans a takeover. Kyobo denied the rumor after the market closed yesterday.
Trading volume was 510.8 million shares, worth 9.2 trillion won. Decliners outpaced advancers, 700 to 116.
The tech-heavy Kosdaq shed 25.22 points, or 3.1 percent, to close at 792.06.
Trading volume was 522.2 million shares, worth 2 trillion won.
Losers beat gainers, 826 to 145.
By Jung Ha-won Staff Writer [hawon@joongang.co.kr]
with the Korea JoongAng Daily
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