Circuit City, FTA worries drag down Kospi
Korean stocks fell 2.1 percent yesterday as investor sentiment was dented by worries over a global recession following overnight falls in U.S. markets. The benchmark Kospi declined 23.73 points to 1,128.73. Volume was heavy at 588.3 million shares worth 5.7 trillion won ($4.29 billion), with losers outpacing gainers 585 to 249.“The Seoul bourse saw high volatility during the session, weighed by global recession woes. Losses of tech and automaker shares stood out,” said Bae Sung-young, an analyst at Hyundai Securities.
Circuit City Stores, the No. 2 U.S. consumer electronics retailer, filed for bankruptcy protection on Monday, hit by the slowing economy and frozen credit markets.
Tech blue chips traded in negative territory mainly due to Circuit City’s bankruptcy filing. Market leader Samsung Electronics shed 0.8 percent to 470,500 won and consumer electronics giant LG Electronics declined 7 percent.
Automakers lost ground on concerns that U.S. President-elect Barack Obama will likely move to protect his country’s automobile industry. Top carmaker Hyundai Motor fell 3.4 percent and its affiliate Kia Motors shed 2.6 percent
Among blue chips on the top 10 list in terms of market cap on the main Kospi, only SK Telecom, the nation’s No. 1 mobile service provider, advanced. It edged up 1.4 percent.
The world’s largest shipbuilder Hyundai Heavy Industries tumbled 7.8 percent and the nation’s second-largest player Samsung Heavy Industries fell 4.7 percent. Doosan Heavy Industries also lost 6.8 percent.
Financial shares were also down. KB Financial Group retreated 2.7 percent and Shinhan Finance Holdings dropped 2.4 percent. Woori Finance Holdings also fell 3.9 percent. Industrial Bank of Korea, which provides loans to small and midsized companies went down 3.9 percent. Citigroup cut its recommendation to “hold,” from “buy,” in a note, saying bad loan provisions will stay at “higher” levels amid growing macroeconomic headwinds.
U.S. stocks closed lower Monday on lingering concerns over a global recession. The Dow Jones industrial average edged down 0.82 percent and the tech-dominated Nasdaq composite index shed 1.86 percent.
Yonhap
with the Korea JoongAng Daily
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