South Korean stocks plunged 1.18 percent to a near four-month low Wednesday as uncertainties about the future of the eurozone and the slowing Chinese economy sapped investor sentiment here, analysts said. The Korean won declined sharply against the U.S. dollar.
The benchmark Korea Composite Stock Price Index lost 24.08 points to close at 2,016.21, marking the lowest since March 16. Trading volume was heavy at 444.1 million shares worth 7.44 trillion won ($6.55 billion), with decliners beating gainers 534 to 297.
“Investors are worried about what will happen in the eurozone in the future. The Greek crisis and fast-spreading fears about the sluggish Chinese economy are wielding power in the global financial market,” said Kim Hyung-ryeol, a senior analyst from Kyobo Securities Co.
The single-currency economic bloc has been teetering on the brink of collapse after Greek citizens rejected austerity measures offered by its international creditors in a landmark referendum Sunday.
Meanwhile, China’s benchmark Shanghai index has been on a free fall despite a series of market-stabilizing measures by the Chinese authorities.
“Due to the widespread uncertainties, investors tend to be playing it safe at the moment,” said the analyst. “They will not move until the government comes up with firm measures to shrug off the uncertainties.”
Oil refineries and petrochemical companies are among the biggest losers amid the downbeat trend of crude oil prices stemming from the so-called Grexit, or a Greek exit from the euro.
Industry leader SK Innovation toppled 4.85 percent to 108,000 won, and No. 3 S-Oil fell 3.8 percent to 60,800 won, while LG Chem, the country’s leading chemicals maker, plunged 8.69 percent to 236,500 won and Hanwha Chemical sank 6.42 percent to 17,500 won. Korean Air Lines, the country’s flagship air carrier, retreated 3.56 percent to 42,000 won, and Asiana Airlines lost 4.45 percent to 6,870 won.
Pharmaceutical and cosmetics firms also finished bearish, with Hanmi Science, a leading medicine manufacturer, down 0.3 percent to 128,000 won and cosmetics giant AmorePacific skidding 1.04 percent to 380,000 won.
Lotte Shopping dropped 3.11 percent to 234,000 won, and Shinsegae fell 4.01 percent to 251,500 won as they were awaiting the bidding results for a license to open new downtown duty-free shops later this week.
The local currency fell 6.5 won to end at a two-year low of 1,136.7 won versus the U.S. greenback on subdued appetite for risky assets.
Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys fell 1.8 basis points to 1.807 percent and the return on the benchmark five-year government bonds dropped 2.8 basis points to 2.073 percent. (Yonhap)
