Won passes 1,500 mark amid Kospi plunge

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Won passes 1,500 mark amid Kospi plunge

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An electric board at Korea Exchange Bank’s headquarters in central Seoul indicates the local currency tumbled against major currencies yesterday. [YONHAP]

Korea’s won fell yesterday, approaching a decade low, on concern Asia’s fourth-largest economy will slip into a recession for the first time since 1998.

The won dropped 1.3 percent to 1,513 per dollar, according to Seoul Money Brokerage Services.

“Korea is more sensitive to a global slowdown than any other market,” said Dwyfor Evans, a currency strategist at State Street Global Markets in Hong Kong. “We expect continued weakness in the won.”

Seoul stocks also plunged 3.4 percent in a volatile session yesterday, dragged down by sell-offs in construction and auto shares on deepening recession woes, analysts said. The benchmark Kospi was down 33.59 points to 970.14 after drifting in and out of positive territory in early trading. The index fell below the 1,000-point level again following a 5.8 percent surge on Friday.

Volume was heavy at 458.78 million shares worth 4.7 trillion won ($3.1 billion), with losers outnumbering gainers, 594 to 230.

“Despite a strong start thanks to Wall Street rallies in the previous session, jitters set in again over a possible economic slowdown, sparking sell-offs across the board,” said Lee Sun-yup, an analyst at Goodmorning Shinhan Securities.

Most shares closed sharply lower, with builders and auto shares severely rattled. With rumors spreading that the construction sector might face restructuring, Daewoo Engineering and Construction, the country’s No. 1 builder, dropped 5.7 percent. Hyundai Engineering and Construction also plunged 8.4 percent, extending losses.

Industry leader Hyundai Motor dived 12.9 percent, while its affiliate Kia Motors fell by its near daily limit of 14.9 percent.

Bloomberg, Yonhap
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