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Kospi falls 1.3% on concerns for U.S. economy

Aug 02,2008
Seoul’s main stock market fell 1.3 percent yesterday as weaker U.S. economic data sparked worries over the health of the world’s largest economy, analysts said. The benchmark Kospi lost 20.9 points to 1,573.77.

Volume was thin at 228.4 million shares worth 3.3 trillion won ($3.24 billion), with losers outpacing gainers 568 to 242.

“Following Wall Street losses, the Seoul bourse traded lower. Foreign investors became net sellers of local stocks in one session, weighing on the market,” said Kang Moon-sung, an analyst at Korea Investment and Securities.

Kang added that investors also took a breather ahead of U.S. key data on employment due late yesterday.

Korea’s July consumer inflation reading also dented sentiment. The nation’s consumer prices jumped 5.9 percent on-year last month, marking the fastest growth in almost 10 years.

U.S. stocks fell Thursday on weak economic growth and unemployment readings. The Dow Jones industrial average declined 1.8 percent and the tech-dominated Nasdaq composite index shed 0.2 percent.

The U.S. Commerce Department said Thursday that the country’s gross domestic product grew 1.9 percent in the second quarter, below market expectations. The number of Americans seeking jobless benefits hit a five-year high.

Financial shares on the Seoul market traded in negative territory, hurt by lingering concerns over a credit crunch. Top lender Kookmin Bank shed 0.5 percent and No. 2 financial services firm Shinhan Financial Group fell 1.3 percent.

Shares of Kumho Asiana Group suffered heavy losses even after the group said Thursday that it will raise about 4.6 trillion won by selling properties and securities of its affiliates to dispel investors’ worries over its financial health.

No. 1 local builder Daewoo Engineering and Construction tumbled 13.4 percent and Korea Kumho Petrochemical fell by the daily limit of 15 percent.

Shares of Hanwha Corp., the country’s ninth-largest conglomerate, rose 0.5 percent on a report that an international commercial arbitration court has ruled in favor of Hanwha Group’s takeover of Korea Life Insurance, ending years of legal dispute over the controversial deal. Yonhap



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