Korean stocks in a freefall as U.K. nears EU exit

A currency trader talks near a screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room in Seoul on Friday. [NEWSIS]

Due to mounting fears of Britain’s leave from the European Union, both Kospi and Kosdaq were plunging as of about 1:40 p.m. on Friday.

The benchmark stock exchange index Kospi tumbled 3.93 percent to 1,907.96 as of 1:44 p.m. and the tech-heavy secondary Kosdaq slid 5.23 percent to 643.97.

The Kospi opened 0.75 percent higher at 2,001.55 but as the British referendum result strongly indicates a narrow win for the leave camp with 51.9 percent of the voters supporting the exit, 3.9 percentage points ahead of the remain camp at around 1:30 p.m., Korean, time, the Korean financial market was in a free-fall.

The Kospi even broke the 1,900 mark to reach 1,892.75 at 12:48 p.m.

Korea Exchange, the index operator, issued a sidecar on the Kosdaq at 12:50 p.m. as the index fell more than 6 percent and suspended trading for five minutes. It is a second sidecar since Feb. 12.

A sidecar is issued when the futures prices of the Kosdaq 150 Index rise or fall more than 6 percent and the spot prices show 3 percent rises or falls for more than one minute. The issuance of the sidecar is limited to once a day.

The Korean won’s value also plunged against the dollar to 1,178.20 won, down 31.9 won from Thursday. The Japanese yen-dollar exchange rate broke the 100 mark to 99 yen per dollar for the first time since November 2013.

The British pound was at its lowest since 1985.

Officials from the Ministry of Strategy and Finance, Financial Services Commission, Bank of Korea and Financial Supervisory Service were scheduled to meet to discuss emergency measures to stabilize the market at about 2 p.m.

BY SONG SU-HYUN [song.suhyun@joongang.co.kr]