Oil worries cause losses across the board
Korean stocks tumbled nearly 2 percent yesterday on a selling spree across the board as concerns deepened over mounting inflationary pressure due to sky-high oil prices, analysts said.The benchmark Korea Composite Stock Price Index fell 34.58 points, or 1.91 percent, to 1,774.38, the lowest in nearly two months. Volume was moderate at 318 million shares worth 5.3 trillion won ($5.1 billion), with losers outpacing winners, 639 to 173.
“Overnight gains in U.S. stocks and a slight retreat in oil prices were not enough to allay investor concerns over rising energy costs and their impact on already high inflation,” said Bae Sung-young, an analyst at Hyundai Securities. “Fed Chairman Ben Bernanke’s comments on inflation also contributed to making investor sentiment go sour.”
Bernanke said in a forum that he would step up efforts to keep inflation expectations in check, adding that the latest price surges of crude oil have increased “upside risks to inflation.”
His remarks confirmed the severity of recent energy price hikes and were interpreted in the market as a sign that the Fed might consider a rate increase down the road, analysts said.
Most large-cap shares were affected as foreigners and institutions dumped shares indiscriminately. Oil-sensitive company shares were among the worst performers.
Top shipper Hanjin Shipping plunged 4.8 percent and Hyundai Merchant Marine lost 2.4 percent. Shipbuilders also slumped with the nation’s largest shipyard Hyundai Heavy Industries dropping 3.3 percent.
Tech exporters closed down, reversing from their strong starts. Industry leader Samsung Electronics was down 2.9 percent at 666,000 won, while its rival LG Electronics shed 2.2 percent.
Airline companies added to the market’s gloom. No. 1 flag carrier Korean Air Lines fell 2.0 percent and smaller carrier Asiana Airlines dropped 1.8 percent.
Despite overall market downswings, steel shares fared relatively well following reports that industry leader Posco might raise steel prices. Posco inched down 0.7 percent, while Hyundai Steel gained 1.2 percent.
The won rose to 1,025.0 per U.S. dollar.
Yonhap
with the Korea JoongAng Daily
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