Kospi nears 2008 low after week of woe
Korean stocks tumbled nearly 1.8 percent yesterday as fears deepened that surging oil prices could dent corporate profitability by spurring inflation and causing a global economic slowdown, analysts said.The benchmark Kospi lost 28.6 points, or 1.8 percent to 1,577.94. Volume was thin at 242.9 million shares worth 4.1 trillion won ($3.9 billion), with losers outpacing gainers 529 to 274.
The index has fallen over 8 percent during a seven-day losing streak and neared its yearly closing low of 1,574.44.
“Investor sentiment was seriously hurt by surging oil prices and concerns over inflation and a slowing economy,” said Im Tae-geun, an analyst at Daewoo Securities. “Foreign investors especially led the decline by dumping blue-chip shares across the board.”
Major financial companies closed sharply lower, driving the market downward. Top lender Kookmin Bank lost 3.7 percent and leading brokerage Samsung Securities shed 2.7 percent.
Tech shares also contributed to the downswings. Tech titan Samsung Electronics fell 2.7 percent to 616,000 won, while chipmaking giant Hynix Semiconductor plunged 6.8 percent. Tong Yang Investment Bank cut its price target on Hynix by 8.3 percent, citing lower earnings prospects for next year.
Record-breaking oil prices continued to weigh on airline companies. The No. 1 carrier Korean Air Lines declined 2.8 percent, while smaller Asiana Airlines was down 2.3 percent.
Auto issues, however, closed in positive territory on optimism that rising crude prices will force consumers to choose small-sized cars, an area where local automakers have a competitive edge over global leaders.
Top carmaker Hyundai Motor advanced 2.3 percent and its affiliate Kia Motors jumped 4 percent.
Telecom companies closed higher with No. 1 fixed-line service provider KT jumping 2 percent. SK Telecom, the nation’s largest mobile carrier, was also up 0.8 percent.
The price of Dubai crude, Korea’s benchmark, has nearly doubled over the past year and hit a fresh record of $140.31 per barrel on Thursday.
Yonhap, Bloomberg
with the Korea JoongAng Daily
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