Seoul shares finished down more than 4 percent on Monday, erasing almost all the gains earned last week, as deepening worries about the US economy decreased investors' risk appetite and pummelled key exporters and energy counters. The Korea Composite Stock Price Index closed down 4.39 percent at 1,785.83 after finishing last week with a 5 percent gain.
The KOSPI 200 September futures dropped 4.29 percent to 228.90. The KOSPI 200 spot index fell 4.69 percent to 228.89 and the junior Kosdaq market finished down 2.84 percent at 480.43. Selling pressure also mounted amid growing volatility ahead of major events this week including a policy rate meeting in Korea, index futures and options expiry, and US President's speech on Thursday.
The KOSPI Volatility index soared 16 percent. US employment data on Friday showed the world's biggest economy failed to create any jobs last month for the first time in nearly a year, adding pressure on the US central bank to provide more stimulus to the economy. Shares in LG Chem fell 10.5 percent and Kumho Petrochem shed 7.9 percent. S-Oil dropped 10.6 percent and Hanwha Chemical faltered 9.4 percent.
Shipbuilders also led the market lower, falling 7.1 percent, hit by concerns of a fragile global economy weakening global trade and ship orders. Shares in the world's top shipbuilder Hyundai Heavy Industries fell 7.0 percent, Daewoo Shipbuilding fell 9 percent and Samsung Heavy Industries lost 6.5 percent. Bellwether technology and auto shares also sagged, hit by weakening US economy will reduce demand for Korean products. Shares in Samsung Electronics Co fell 4.9 percent and Hyundai Motor tumbled 5.3 percent.