U.S. credit problem damps Korean Kospi

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U.S. credit problem damps Korean Kospi

Korean stocks fell more than 3 percent yesterday as foreign investors continued their selling spree on lingering concerns over a U.S. credit squeeze, analysts said.

The benchmark Kospi plunged 49.29 points, or 3.2 percent, to 1,509.33. Volume was moderate at 292.4 million shares worth 4.6 trillion won ($4.6 billion), with losers outpacing gainers 702 to 130.

Most blue chips took heavy losses, with construction stocks leading the fall. GS Engineering and Construction, Korea’s third-largest builder, dropped 12,700 won, or 12 percent, to 89,800 won. This is the steepest drop since Jan. 30, leading declines among builders on concern higher interest rates will damp demand for homes. Hyundai Engineering and Construction, the country’s biggest builder by market value, fell 4,300 won, or 6.9 percent, to 58,100. Daewoo Engineering and Construction dropped 950 won, or 7.4 percent, to 11,850 won.

Banking shares were also weak. Top lender Kookmin Bank slid 0.9 percent, and No. 2 financial services group Woori Financial Holdings slumped 5.8 percent.

Samsung Electronics lost 2.5 percent to 553,000 won and rival Hynix Semiconductor fell 4.5 percent. LG Electronics, the world’s fourth-largest maker of mobile phones, lost 7,000 won, or 6.2 percent, to 105,500 won. CJ Investment and Securities cut its price target on LG Electronics by 13 percent to 140,000 won, citing lower earnings prospects from the third quarter.

Shipbuilders, which gained ground in earlier trading, also ended lower. Hyundai Heavy Industries, the world’s largest shipbuilder, lost 1.7 percent, and third-largest Samsung Heavy Industries fell 0.9 percent.

Lotte Shopping, Korea’s largest department store chain, fell 3,500 won, or 1.2 percent, to 293,500 won. Hyundai Department Store, the second-largest, lost 2,800 won, or 3.5 percent, to 78,100 won. Goldman Sachs lowered its target price on Lotte Shopping by 11 percent to 319,000 won and on Hyundai Department by 17 percent to 89,000 won, citing “a more gloomy consumption environment.’’

MegaStudy, an educational-services provider, fell 14,900 won, or 6.2 percent, to 225,100 won, the lowest in a week. Macquarie Group lowered its target price on the stock by 16 percent to 350,000 won. Yonhap, Bloomberg
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