Seoul shares slumped on Wednesday, dragged down by large-cap technology issues as Wall Street fell overnight on eurozone debt jitters and lackluster US growth data. "Because of the general lull in market activity, even a small volume of sell-offs are causing large fluctuations in the index," said Kim Seong-bong, a market analyst at Samsung Securities.
"Looking into the near future, I think we're likely to see more upside pressure with EU governments expected to bridge their opinion gaps and on hopes that the US economy will pick up during the holiday season" he added. Foreign investors were net sellers, offloading a net 170.9 billion won ($149.2 million) worth of shares. The Korea Composite Stock Price Index (KOSPI) was down 1.61 percent at 1,796.88 as of 0230 GMT.
Official data released on Tuesday revealed that the US economy had grown at a slower pace in the third quarter than previous estimated, but firm consumer spending and drop in business inventories necessitating a restock are setting the stage for a rebound for the fourth quarter. Euro zone leaders took further steps to settle their fractured opinion divide, with French President Nicholas Sarkozy embracing a German-led initiative in empowering eurozone authorities to intervene in the budget finances of its member states.
Large cap technology shares dipped, with Samsung Electronics Co Ltd falling 2.39 percent and Hynix Semiconductor Inc sliding 4.09 percent. Finance shares exposed to persistent European debt concerns fell, with KB Financial Group Inc leading losses, down 3.45 percent.