Kospi posts biggest drop in 4 years at 3.65% on U.S. recession worries

Finance

Kospi posts biggest drop in 4 years at 3.65% on U.S. recession worries

Published: 02 Aug. 2024, 17:44 Updated: 02 Aug. 2024, 18:26

신하늬
shin.hanee@joongang.co.kr

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,676.19 points on Friday, down 3.65 percent, or 101.49 points, from the previous trading session. [YONHAP]

Korea’s benchmark stock index plunged by over 100 points on Friday for the steepest fall in 4 years, spurred by growing U.S. recession worries.

The Kospi shed 101.49 points, or 3.65 percent, from the previous day to close at 2,676.19 points on Friday. This represented the biggest plunge since a 3.66 percent drop in August 2020.

Trade volume was heavy at 523.78 million shares worth 12.87 trillion won ($9.38 billion), with decliners far outnumbering gainers 868 to 58. Institutions and foreigners sold a combined 1.62 trillion won worth of stocks, offsetting individuals' stock purchases valued at 1.61 trillion won.

Market heavyweights closed significantly lower, with tech shares leading the decline.

Samsung Electronics lost 4.21 percent to close at 79,600 won, falling below the 80,000 won mark for the first time since June. SK hynix was hit even harder, falling by a whopping 10.4 percent to close at 173,200 won.

Carmaker Hyundai Motor shed 3.8 percent, and refiner SK Innovation shed 2.7 percent to 104,300 won.

Among the few gainers, battery maker LG Energy Solution rose 0.8 percent to 336,000 won, refiner S-Oil climbed 0.7 percent to 68,500 won and Hybe was up 3.1 percent to 180,800 won.

The rapid slide in Seoul followed an overnight drop in U.S. tech shares, which has been spurred by growing recession woes in the United States amid a manufacturing contraction. The U.S. Purchasing Managers’ Index for July came at 46.8 on Thursday, falling short of the market expectation of 48.8. The figure was the lowest in eight months.

Overnight, the Dow Jones Industrial Average fell 1.2 percent to 40,347.97 points, while the tech-heavy Nasdaq plunged 2.3 percent to 17,194.15.

The local currency had been trading at 1,371.2 won against the dollar as of 3:30 p.m., up 6 won from the previous session.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds fell 3.3 basis points to 2.943 percent, and the return on the benchmark U.S. 10-year bonds fell 5.3 basis points to 3.979 percent.

BY SHIN HA-NEE, YONHAP [shin.hanee@joongang.co.kr]