Stocks drop to lowest level in 2021 on China, U.S. concerns

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,908.31 points on Wednesday, down 53.86 points, or 1.82 percent, from the previous trading day. [NEWS1]

Stocks fell nearly 2 percent Wednesday, while the won fell to a 14-month low against the dollar amid ongoing investor concerns over the debt crises of Chinese property developers and the impasse in the U.S. Congress on raising the debt limit.

The benchmark Kospi fell 53.86 points, or 1.82 percent, to close at 2,908.31 points. It was the lowest finish since Dec. 30 last year.

Trading volume was moderate at about 887.63 million shares worth some 15.4 trillion won ($13 billion), with losers outnumbering gainers 780 to 118.

Foreigners sold a net 279 billion won, while retail investors bought a net 177 billion won. Institutions purchased a net 84 billion won.'

Local stocks got off to an upbeat start tracking overnight Wall Street gains before turning lower as investor sentiment worsened after New Zealand's central bank raised interest rates for the first time in seven years.

"While the hike was expected, recently worsened investor sentiment reacted sensitively to bad news," Park Kwang-nam, an analyst at Mirae Asset Securities, said. "As economic momentum slows down and expectations of improved corporate earnings decrease, investors continue to prefer safer assets."

Investor concerns have grown after Chinese property developer Fantasia Holdings Group failed to repay some of its debt earlier this week amid the ongoing default crisis of Evergrande Group.

The lack of progress in talks between U.S. lawmakers to raise the debt ceiling and avoid a default before the Oct. 18 deadline also added to investor worries.

Most large caps closed lower in Seoul.

Samsung Electronics declined 1.25 percent to 71,300 won, and chipmaker SK hynix fell 1.43 percent to 96,500 won.

Pharmaceutical firm Samsung Biologics tumbled 2.59 percent to 791,000 won, and Celltrion fell 2.75 percent to 212,000 won.

Chemical firm LG Chem moved down 0.54 percent to 743,000 won, while automaker Hyundai Motor edged up 0.26 percent to 194,000 won.

Internet portal operator Naver added 0.67 percent to 373,000 won, and Kakao gained 1.8 percent to 113,000 won.

The Kosdaq lost 33.01 points, or 3.46 percent, to close at 922,36.

The local currency closed at 1,192.3 won against the dollar, up 3.6 won from the previous session's close and the lowest closing since Aug. 4 last year when it reached 1,194.1 won against the dollar.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds added 7.4 basis points to 1.724 percent, and the yield on the benchmark 10-year government bond gained 4.7 basis points to 1.52 percent.

BY LEE TAE-HEE, YONHAP [lee.taehee2@joongang.co.kr]