Blue chips hit hard as markets nose-dive

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Blue chips hit hard as markets nose-dive

Seoul stocks closed more than 10 percent lower yesterday as unrelenting sell-offs of blue chips continued amid a grim economic outlook, analysts said.

The benchmark Kospi plummeted 110.96 points, or 10.6 percent, to 938.75. Volume was moderate at 437.5 million shares worth 5.4 trillion won ($3.8 billion), with losers outpacing gainers 842 to 41.

“The fallout rate of foreign investment in the local bourse was exacerbated at a rapid level, as a projected slowdown in the global economy continues to plague global markets,” said Seo Dong-pil, an analyst at Hana Daetoo Securities.

The Kospi has more than halved from its historic high of 2,085 points in Nov. 2007, largely on selling by offshore investors. Foreign selling amounted to 34.3 trillion won so far this year, according to the Korea Exchange, the bourse operator.

Steep losses in earlier trading forced the Korea Exchange to suspend program trading for five minutes, for the 11th time this year, after the main index’s futures prices fell more than 5 percent.

And trading of Kosdaq shares was suspended for 30 minutes for the second day in a row after the index dropped. The secondary index closed at 276.68, down 32.27 points, or 10.5 percent.

Many blue chips on the Kospi suffered hefty losses - some by double-digit percentages - on massive selling by foreign investors.

Shipbuilders were hit hard, with the top three players each dropping just under the daily limit of 15 percent during the session. Industry leader Hyundai Heavy Industries slumped 14.8 percent and second biggest Samsung Heavy Industries slid 14.7 percent.

Other exporters were also severely dented. Hyundai Motor, the nation’s top automaker, slid by 7.9 percent. Its smaller affiliate Kia tumbled by 14.8 percent, though it reported it narrowed losses in the third quarter.

Steel and construction shares also finished in the red, with the biggest steel producer Posco falling 12.2 percent and Hyundai Engineering and Construction dropping by the daily limit of 15 percent.

Lotte Shopping lost 13 percent on earnings that missed analyst estimates. STX Pan Ocean Co. fell 15 percent after freight tariffs fell. Yonhap, Bloomberg
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