Seoul shares lose 0.7% on Portugal bank woes

By Seo Jee-yeon
  • Published : Jul 11, 2014 - 21:13
  • Updated : Jul 11, 2014 - 21:13
South Korean stocks retreated 0.7 percent on Friday as concerns of a fresh wave of bank failures in Europe dampened investors’ appetite for riskier assets, analysts said.

The local currency fell sharply against the U.S. greenback. The benchmark Korea Composite Stock Price Index tumbled 14.1 points to 1,988.74, failing to retain the psychologically important 2,000-point level, after reports of accounting irregularities at one of Portugal’s largest banks.

Trading volume was moderate at 271.9 million shares worth 3.5 trillion won ($3.44 billion), with losers outpacing winners 417 to 379.

“The news from Portugal seemed to be the only outstanding factor that dragged down the Korean market today,” said Lim

Dong-rak, a senior researcher at Hanyang Securities “Otherwise, the index could have finished above the 2,000-point level this week. It has managed to stay above the line for days despite a poor earnings outlook.”

The holding company of Portugal’s Banco Espirito Santo suspended trading its shares and bonds on Thursday, sparking fears of another European debt crisis.

“Investors are worried that the Portuguese bank’s liquidity problem will spill over into the other eurozone countries and the world,” Lim said.

Most shares went south, led by large-cap exporters of electronics, carmakers and steelmakers. Tech giant Samsung Electronics, the country’s top market cap, sank 1.68 percent to 1,284,000 won and its rival LG Electronics fell 0.95 percent to 72,800 won.

Hyundai Motor, the world’s fifth-biggest carmaker, dropped 1.92 percent to 224,000 won and Sangyong Motor, the local unit of Indian automaker Mahindra & Mahindra, slid 1.99 percent to 7,900 won.

Top steelmaker POSCO fell 2 percent to 294,500 won and the world’s largest shipyard Hyundai Heavy Industries dropped 2.99 percent to 162,500 won.

The local currency ended at 1,019 won per the greenback, down 5.6 won from Thursday, extending its losing streak to six consecutive sessions. (Yonhap)