Kospi’s tumble passes 1,000 point barrier

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Kospi’s tumble passes 1,000 point barrier

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FRX dealers at KEB headquarters in Seoul hard at work yesterday. [YONHAP]

Korean stocks nose-dived 6.7 percent yesterday as overnight Wall Street plunges triggered a selling spree, analysts said. The local currency plunged to a 10-year low against the greenback.

The benchmark Kospi Index tumbled 68.13 points to 948.69. Volume was moderate at 419.18 million shares worth 3.88 trillion won ($2.6 billion). Losers outnumbered gainers 791 to 66.

The Korea Exchange, the nation’s bourse operator, suspended program trading early on for five minutes after the main index futures prices fell more than 5 percent.

Builders suffered the most on growing concerns that commercial lenders’ liquidity program for flagging small builders might derail. Major construction firms posted double-digit losses, with top builder Daewoo Engineering and Construction tumbling 12.18 percent to 7,640 won and Hyundai Engineering and Construction losing 14.95 percent to end at 42,100 won. Financial shares were also rattled hard. Shinhan Financial Group plunged 9.74 percent to 26,400 won and Woori Finance Holdings lost 10.62 percent to 5,050 won. Hynix, the world’s second-largest computer memory chip maker, fell 14.91 percent to 6,390 after UBS AG cut its rating to “sell,” citing sluggish demand forecast for memory chips down the road. Samsung Electronics fell 3.42 percent to 423,000 won.

The local currency closed at 1,497 won to the dollar, down 50.50 won from Wednesday’s close, as offshore investors dumped the won after selling off local shares. It was the lowest level against the dollar since March 1998. Choi Jong-ku of the Finance Ministry’s international financial division said that growing volatility in the local currency market is “excessive” and South Korea will take necessary actions to stabilize it. Yonhap, Bloomberg
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