[STOCK / WON]Shares plunge 6%, won falls to 1,392

Seoul stocks plunged 6.03 percent yesterday as the benchmark KOSPI index fell 71.34 points to close at 1,111.34. The local currency also dropped by 44.5 won against the dollar, finishing at 1,392.

"Concerns over global banking sectors and worsening earnings outlooks sent the local key stock index sharply lower," Kwak Joong-bo, an analyst at Hana Daetoo Securities, was quoted as saying by Yonhap News.

"A selling spree by foreign investors weighed on the market."

With weaker U.S. economic data and dimmer corporate earnings outlooks harming investor sentiment, trade on the Seoul bourse was temporarily halted for five minutes, after KOSPI 200 futures dropped more than 5 percent for more than one minute from 11:01 a.m. It was the first such emergency break this year.

Volume was moderate at 359.2 million shares worth 4.49 trillion won ($3.23 billion), with losers outpacing gainers 780 to 67. Foreign investors dumped a net 181 billion won worth of local stocks on the main bourse.

Financial shares lost ground on worries that bleak corporate earnings would weigh on banks` balance sheets.

KB Financial Group, the holding company of Kookmin Bank, tumbled 9.16 percent to 35,200 won and its rival Shinhan Financial Group declined 6.25 percent to 30,000 won.

Daewoo Shipbuilding & Marine Engineering, the world`s third-largest shipbuilder, nosedived 12.65 percent to 17,950 won after state-run Korea Development Bank rejected a call by Hanwha Group, the preferred bidder on the shipyard, to partially sell its stake in the shipbuilder.

Market bellwether Samsung Electronics fell 6.13 percent to 459,500 won and top carmaker Hyundai Motor shed 10.42 percent to 43,000 won.

Woori Financial, operator of Korea`s second-largest bank, plunged 8 percent to 7,820 won in Seoul. Samsung dropped 5.8 percent to 461,000 won. Hyundai Motor fell 6.15 percent and Kia Motors retreated 4.88 percent after Fitch Ratings cut its credit rating on the automakers to "junk," citing a deepening slump in the global auto industry.

The local currency ended at 1,392 won to the dollar, down 44.5 won from Wednesday`s close, as offshore investors unload local stocks.

The currency snapped a two-day gain after Vice Finance Minister Bae Kook-hwan said yesterday that the nation`s economic growth in 2009 is likely to fall short of central bank predictions.

By Lee Yong-sung



(danlee@heraldm.com)