Kospi wilts on global slowdown indications
Stocks sank by nearly 2 percent Wednesday on concerns about a global economic slowdown following weak manufacturing data from the United States and Europe.The weaker-than-expected data also sent the local currency down sharply against the dollar on reduced appetite for risky assets.
Taking a cue from overnight losses on Wall Street, the Seoul stock market opened lower and extended its losses into the afternoon session.
U.S. stocks plunged Tuesday after the Institute for Supply Management showed the world’s largest economy’s manufacturing activity had contracted to its lowest level since June 2009. The Dow Jones industrial average fell 1.3 percent to close at 26,573.04.
The manufacturing purchasing managers’ index (PMI) for the eurozone also hit its lowest level since October 2012.
“Disappointing manufacturing PMI from the U.S. and the eurozone reignited concerns of a global economic slowdown and affected the local stock market,” said Tae Yoon-sun, an analyst at KB Securities.
“With more key economic data scheduled to be announced Friday, investors are likely to take a conservative approach,” the analyst said.
Institutions and foreigners were net sellers, off-loading 404 billion won and 116 billion won worth of stocks, respectively. Individual investors scooped up a net 502 billion won.
Most large cap shares remained in negative terrain across the board.
Market kingpin Samsung Electronics dipped 2.56 percent to 47,600 won, while No. 2 chipmaker SK Hynix plunged 3.05 percent to 79,500 won.
The country’s largest automaker by sales Hyundai Motor tumbled 3.02 percent to 128,500 won, and its sister company Kia Motors dived 1.66 percent to 44,300 won. Auto parts maker Hyundai Mobis dropped 0.81 percent to 245,500 won.
Pharmaceutical giant Celltrion slid 0.58 percent to 172,500 won.
The secondary Kosdaq fell 7.59 points, or 1.20 percent, to close at 624.51.
The local currency closed at 1,206.00 won against the dollar, sharply up 7.00 won from the previous session’s close.
Bond prices, which move inversely to yields, ended higher. The yield on three-year bonds fell 2.0 basis points to 1.303 percent, while the return on 10-year bonds lost 0.1 basis points to 1.497 percent.
BY KO JUN-TAE, YONHAP [ko.juntae@joongang.co.kr]
with the Korea JoongAng Daily
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