C& rumors a wet blanket on Kospi’s fire

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C& rumors a wet blanket on Kospi’s fire

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The Seoul stock market hit 1,076.02 at one point during trading hours yesterday but closed down at 968.97. [YONHAP]

Korean stocks fell more than 3 percent yesterday on rumors that the International Monetary Fund has offered to provide the country with dollar liquidity, analysts said.

“Unconfirmed market rumors, especially the IMF offer of support, seem to have caused confusion among investors,” said Bae Sung-young, an analyst at Hyundai Securities.

Finance and construction stocks took a toll. A measure tracking 54 financial stocks was the biggest contributor to the Kospi decline, dropping 12 percent. Woori Finance Holdings, which controls Korea’s second-biggest bank, tumbled its daily percentage limit of 15 percent. Shinhan Financial Group, which runs the third-largest, also declined 15 percent. The stocks fell on concern financial companies will fail to reclaim all their loans from C& Group.

Leading builder Daewoo Engineering and Construction fell 7.92 percent. Machinery and automakers also finished in the red. Top power generator producer Doosan Heavy Industries plunged 8.7 percent and leading automaker Hyundai Motor slid 5.16 percent. Hyundai Heavy Industries, the world’s leading shipbuilder, fell 0.72 percent.

Tech and steel stocks, however, prevented the main index from falling further. Tech behemoth Samsung Electronics rose 2.48 percent to 475,000 won ($332) and No. 1 steelmaker Posco added 2.51 percent.

Asiana Airlines, the nation’s second-largest airline, added 7.6 percent. The price of jet fuel, the single-biggest expense for the company, dropped 3.8 percent on Tuesday due to falling crude prices, taking its four-day decline to 12 percent.

Yonhap, Bloomberg
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