KOSPI plummets below 1,900 during trading session, shedding 2.4% at close
Korean stocks tumbled 2.4 percent to a 15-week low on Tuesday hit by rising worries over radiation leaks from Japan’s quake-stricken power plant.
The benchmark KOSPI fluctuated during the day, plunging to 1,882.45 at one point though it later managed to contain falls to close at 1,923.92.
A day before the index stood at 1,971.23. This was the first time in nearly four months that the KOPSI drops below 1,900 since the index posted 1,895.54 in Nov. 29.
The Korea Exchange said foreign investors were active sellers on the local main bourse.
After opening in positive territory, the key index tumbled as Japan reported a fire at the nuclear power plant in Fukushima, adding to the damage from last Friday’s massive earthquake.
A Korea Exchange official reads The Korea Herald on Tuesday as the stock prices fluctuated in the wake of the Japanese disaster. (Park Hae-mook/The Korea Herald)
Analysts say Korea’s exports are expected to slump as a massive quake in Japan is prompting its currency to remain weak, allowing Japanese products to gain more price competitiveness in overseas markets.
They predict that companies may lose their price competitiveness in overseas markets to Japanese rivals if the Japanese currency’s weakness continues for a while in the wake of the unprecedented quake.
Three months ago, the nation’s key stock index again reached the 2,000-point milestone on strong foreign buying, prompting analysts to predict it will advance further and hit an all-time high in 2011.
The market turnaround came after the KOSPI peaked at an all-time high of 2,064.85 on Oct. 31, 2007 only to fall back below the 1,000 point the next year as the global financial crisis, triggered by the collapse of Lehman Brothers, wreaked havoc on the world and local financial markets.
Analysts predict that it will take some time for the share prices will break through the 2,000 level again.
In a similar vein, the Korean won lost its value by 5.1 won against the U.S. greenback to close at 1,134.8 won per dollar, from 1,129.7 won a day earlier.
On the same day, Japanese shares plunged on panic-selling over worries that radiation from a damaged nuclear reactor would further complicate and endanger the nation’s recovery from its worst-ever earthquake.
The benchmark Nikkei Stock Average, which fell more than 14 percent at one point during the session, ended 10.6 percent to 8,605.15 for its biggest percentage fall since late 2008. The drop comes on top of a 6.2 percent tumble on Monday.
The broader Topix First Section index lost 9.5 percent to 766.73. Most sectors and stocks tumbled during the session in what appeared to be indiscriminate selling.
By Kim Yon-se (email@example.com