Seoul shares plunge 7.5 percent

24 Oct, 2008

Seoul shares posted their lowest close in 40 months on Thursday, led by exporters as fears of a world-wide recession deepened, but Hyundai Motor bucked the trend after reporting better-than-expected quarterly earnings. The Korea Composite Stock Price Index ended down 7.48 percent at 1,049.71 points, its lowest finish since mid-July 2005.
The main board posted the seventh biggest daily percentage loss ever, and has lost 11 percent on the week. The Korea Exchange also halted programme trading on the main board for five minutes from 0048 GMT due to volatile futures prices, its 10th such action this year, and suspended share trading on the junior Kosdaq market for 20 minutes from 0405 GMT citing volatile share prices.
"Market participants are taking flight to cash, and are indiscriminately selling out of assets that are deemed riskier than cash equivalents," said Lee Jae-mahn, a market analyst at Tong Yang Securities. "The financial crisis is now spreading to emerging economies, which alarms investors here greatly. The current situation is not as bad as it was during the 1997 Asian currency crisis, as corporate fundamentals and the country's foreign currency reserves are in far better shape than then, but it could get as bad," he added.
But the main board crawled back somewhat from an earlier 9 percent drop to a low of 1,028.50 points. "Pension funds' buying helped the index a bit," said Sung Jin-kyung, a market analyst at Daishin Securities. Pension funds were net buyers for a fourth consecutive session, picking up a net 189 billion won ($133.8 million) to bring their total buying for the week 478 billion won.
Foreign investors were net sellers of 100 billion won worth of shares, and institutions offloaded 64 billion won. Outperforming defensive issues and automakers also helped prevent the index from falling further. Hyundai Motor, South Korea's top automaker, turned positive to end 1.2 percent higher after reporting forecast-beating third-quarter profits.
KTF, South Korea's second-biggest mobile phone operator, ended flat. But blue chip technology issues led losses, with Samsung Electronics, the world's No 1 memory chipmaker, sinking 6.99 percent and LG Electronics, the world's No 4 maker of cellphones, down 8.29 percent.
Steelmaker POSCO tumbled 6.93 percent, and Hyundai Steel dropped 14.9 percent. Brokerages also tumbled on liquidity squeeze concerns, with Hyundai Securities plunging 13.79 percent and Daishin Securities shedding 10.95 percent. Retail investors bought a net 139 billion won.
Decliners outnumbered advancers by 807 to 57, with 28 titles ending flat. Trade volume stood at 394 million shares worth 5.3 trillion won compared with 367 million shares worth 5.2 trillion won on Wednesday. The KOSPI 200 December futures index lost 6.00 points to 139.50 and the KOSPI 200 spot index shed 10.66 points to 137.47. The junior Kosdaq fell 7.92 percent to 308.95 points.

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