Investors brace for prolonged Kospi losses
Korean stocks tumbled 2.99 percent Tuesday as investors dumped automakers’ and tech shares, analysts said. The local currency sharply fell against the U.S. dollar.The benchmark Kospi fell 35.3 points to 1,144.31. Volume was moderate at 429.6 million shares worth 4.05 trillion won ($3 billion), with losers outpacing gainers 630 to 205.
“After the local bourse failed to surpass the 1,200-point level in recent sessions, investors seemed to believe that it may take time to see a market recovery,” said Rhoo Yong-seok, an analyst at Hyundai Securities Co. “Overnight losses in U.S. markets and the local currency’s weakness also threw cold water on investor sentiment.”
“Investors are cashing in,” said Lim Chang-gue at Samsung Investment Trust Management Co. in Seoul. “We’re continuing to witness negative news flow, all of which is confirming that global economic activity is tapering off quickly.”
U.S. stocks closed lower Monday, with the Dow Jones industrial average shedding 0.69 percent and the tech-dominated Nasdaq composite index falling 2.04 percent.
The local currency ended at 1,338 won to the dollar, down 29 won, or 2.17 percent, from Monday’s close, as offshore investors cut their holdings of local stocks and importers snapped up the greenback to cover the bill, dealers said. The Korean currency has declined 30 percent to the dollar so far this year. Foreign investors dumped a net 65.5 billion won worth of local stocks on the Seoul bourse.
Automakers lost ground on worsening situations for the global auto industry. Top carmaker Hyundai Motor declined 10.38 percent to 41,000 won and its affiliate Kia Motors tumbled 14.74 percent to 6,710 won. The two carmakers said they had adopted an “emergency management scheme” at all of their plants to cope with a widening economic downturn. They have frozen salaries for office managers and cut combined sales targets this year by 12.5 percent.
Tech blue chips traded in negative territory. Market leader Samsung Electronics shed 6.07 percent to 456,500 won and chip giant Hynix Semiconductor lost 6.21 percent to 7,700 won. KB Financial Group fell 5.47 percent to 34,550 won and top steelmaker Posco declined 3.95 percent to 376,500 won. Yonhap, Bloomberg
with the Korea JoongAng Daily
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