Massive sell-offs hurt Korean stock markets

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Massive sell-offs hurt Korean stock markets

The subprime mortgage loan woes hit the Seoul stock market hard yesterday, resulting in the biggest drop in the Kospi’s history. The main index plunged by 125.91 points, or 6.93 percent, closing at 1,691.98.
The main board opened 70 points lower and continued to decline further as foreign and individual investors kept dumping shares. A trading curb, still known as a sidecar in Korea, was activated to stop program-based trading in the early morning. A sidecar is activated when futures are traded at a price 5 percent higher or lower than its previous close for over a minute.
All sector indexes declined and securities, shipping, machinery and construction indexes fell over 10 percent. Samsung Electronics lost 5.2 percent, Posco shed 4.5 percent, Korea Electric Power declined 3.2 percent and Hyundai Motor fell 2.2 percent.
Shipbuilding suffered severely yesterday. Daewoo Shipbuilding and Marine Engineering, STX Shipbuilding and Doosan Infracore plummeted by the daily limit of 15 percent. Hyundai Heavy Industries lost 6.6 percent, and Samsung Heavy Industries sank 13.2 percent.
Among brokerage issues, Hyundai Securities dived by the daily limit; Daewoo Securities and Woori Investment and Securities plunged 12.8 percent. Samsung Securities collapsed 12.1 percent.
Decliners outnumbered climbers, 975 to 34. Some 164 shares plunged by the daily limit.
“The Kospi could fall further but the degree of the drop may be smaller,” said Kim Jeong-hoon, an analyst at Daewoo Securities.
The Kosdaq dived 77.85 points, or 10.15 percent, ending at 689.07. A circuit breaker, activated after a sidecar if futures are traded at prices 10 percent higher or lower for a minute, was put in place in the afternoon. Losers outstripped gainers, 940 to 39. Some 293 shares hit the daily bottom of 15 percent.


By Limb Jae-un Staff Writer [jbiz91@joongang.co.kr]
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