BOK growth estimates undercut KospiKorean stocks finished 0.1 percent lower yesterday as institutions and foreign investors dumped blue chips on growing jitters over the slumping economy.
The benchmark Kospi dipped 0.53 points to 1,022.67. Volume was heavy at 471.8 million shares worth 5.2 trillion won ($3.54 billion). Gainers, however, outnumbered losers 452 to 364.
“The key index lost ground due to foreign and institutional sell-offs despite a gain of more than 1 percent in morning trade,” said Bae Sung-yung, an analyst at Hyundai Securities.
Wall Street’s gains in the previous session were apparently insufficient to quell concerns for Korea’s economy, according to Bae.
The Bank of Korea, the country’s central bank, said Tuesday that growth may fall short of its earlier estimate of 4.4 percent as the global financial crisis has hit the export-driven economy harder than expected, further dampening domestic demand.
Tech exporters led the overall decline, with market heavyweight Samsung Electronics losing 2.9 percent to 441,000 won. Its biggest rival LG Electronics tumbled 3.4 percent after announcing that the company expects a drop in handset sales growth next year.
Financial shares soared when the government announced that it will inject up to 1.3 trillion won to bail out savings banks with bad loans. Shinhan Finance Holdings jumped 5.5 percent, Hana Finance Holdings picked up 5.9 percent and KB Financial Group mounted 4.6 percent. Korea Exchange Bank also jumped 6.5 percent.
Retailers and steelmakers also lost ground. Hyundai Department Store, the nation’s second-largest department store chain, fell 3.7 percent and top steelmaker Posco slid 0.3 percent. Top automaker Hyundai Motor shed 3 percent on news of its production reduction and its affiliate Hyundai Mobis, a car parts maker, slumped 10.7 percent. Hyundai Motor began cutting production overseas with demand for cars down.
Daewoo Engineering and Construction, Korea’s largest builder, climbed 15 percent after the company said it received a $611 million order from Qatar Petroleum to build a ship-repair yard.
U.S. shares closed higher Tuesday, with the Dow Jones industrial average climbing 3.3 percent. Yonhap