Foreign sell-offs drag Kospi down 4 percent
The Seoul stock market nosedived yesterday on concerns about U.S. subprime mortgages. The benchmark Kospi closed at 1,856.45, down 76.82 points, or 4 percent.A selling spree by foreign investors sent the market tumbling by as much as 100 points during the session. They sold more than bought for the 13th-straight trading session yesterday. Their total net sale for the period has exceeded 5 trillion won ($5.4 billion), according to the Korea Exchange.
Yesterday’s loss was triggered by concern that defaults of subprime mortgages, or higher-risk mortgages for borrowers with lower credit, might weaken the U.S. economy, a major export market for Korea, analysts said. Other Asian markets also declined after American Home Mortgage Investment Corp., a subprime mortgage provider, said it has no cash to fund mortgages it had already promised.
Not only global worries about the U.S. but also the belief that Seoul stocks have been overheated pulled down the market, analysts said.
“The big loss in the market could be regarded as a procedure for upgrading market quality,” Samsung Securities said in a report yesterday. “The market will likely remain weak for a while.”
Core blue chips led the day’s losses. Market leader Samsung Electronics sank 5.4 percent to 581,000 won. Another semiconductor giant, Hynix Semiconductor, plunged 6.1 percent. Hyundai Heavy Industries, the top global shipbuilder, declined 4 percent.
Trade volume was 376.4 million shares worth 7.9 trillion won. Losing shares overwhelmed winners, 718 to 106.
The secondary Kosdaq market also sank. The index lost 22.06 points, or 2.7 percent, to close at 789.46.
Volume was 548.4 million shares, valued at 1.9 trillion won. Declining shares led advancers, 793 to 164.
By Moon So-young Staff Writer [symoon@joongang.co.kr]
with the Korea JoongAng Daily
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