Kospi slides on overnight losses in the U.S.
Korean stocks finished 2.06 percent lower yesterday as mounting global banking losses crippled financial shares, analysts said. The benchmark Kospi shed 23.2 points to 1,103.61. Volume was light at 329.53 million shares worth 4.09 trillion won ($2.98 billion), with losers outpacing gainers 654 to 199.“Financial firms were hit hardest by worries over a new global financial crisis, which were exaggerated by overnight banking losses in the United States,” said Rhyu Yong-suk, an analyst at Hyundai Securities.
KB Financial Group, which controls top lender Kookmin Bank, plunged 4.8 percent to 32,100 won. Shinhan Financial Group, which runs Korea’s third-largest bank, retreated 6 percent. Woori Finance Holdings, which controls the second-biggest bank, lost 5.3 percent
Korean financial firms, mostly banks, will have to set aside 2.23 trillion won more in provisions to help restructure 16 construction companies and shipbuilders, the Financial Supervisory Service said on Tuesday. The additional burden may cost as much as 15 percent of estimated earnings per share for Korean banks in 2009, Morgan Stanley said in a note.
Builders also lost ground on lingering concerns over industry-wide restructuring efforts, with leader Daewoo Engineering and Construction sinking 4.14 percent.
Market bellwether Samsung Electronics dropped 3.3 percent to close at 448,500 won, sending the key index even lower. The company recalled 140,000 mobile phones in the Netherlands because some of the devices may not meet Dutch criteria for radio waves. KT Corp., the biggest Korean phone and Internet company, rose 5.8 percent. The company plans to buy the rest of wireless unit KT Freetel that it doesn’t own already to step up competition with SK Telecom and LG Powercom in mobile and fixed-line services. HSBC Holdings raised its recommendation on KT to “overweight” from “neutral,” saying the shares should reflect the potential earnings-per-share gains from the merger.
AtlasBX, an automobile battery maker, rose 15 percent. The stock gained after reporting that profit increased 12-fold last year to 62.4 billion won because of higher product prices and cost reductions.
Yonhap, Bloomberg
with the Korea JoongAng Daily
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