ID :
22087
Wed, 10/01/2008 - 16:22
Auther :
Shortlink :
http://m.oananews.org//node/22087
The shortlink copeid
Seoul shares end lower on U.S. bailout plan rejection
SEOUL, Sept. 30 (Yonhap) -- South Korean stocks edged down Tuesday after tumbling more than 5 percent as investors were spooked by U.S. lawmakers' rejection of a government proposal to rescue the teetering financial sector, analysts said. The local currency fell to a 64-month low against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 8.3 points, or 0.57
percent to 1,448.06. Volume was moderate at 399.2 million shares worth 5.37
trillion won (US$4.45 billion), with losers outpacing gainers 549 to 247.
"An unexpected rejection of the bail-out plan severely hurt investor sentiment,
sending the KOSPI below the 1,400-mark at one point. But institutional buying and
the financial regulator's plans to impose a ban on short selling of stocks helped
pare earlier sharp losses," said Bae Sung-young, an analyst at Hyundai
Securities.
The KOSPI tumbled 5.47 percent at one point in the morning session, weighed by a
selling spree by foreign investors. Offshore investors unloaded a net 126 billion
won worth of local stocks on the Seoul bourse.
On Monday, the U.S. House of Representatives turned down the government-led $700
billion emergency rescue proposal designed to buy bad debts from financial
institutions. The decision sent shockwaves across the globe, raising fears that
instability in the financial sector could cascade into the real economy. The Dow
Jones industrial average sank 6.98 percent and the tech-dominated Nasdaq
composite index crashed 9.14 percent.
South Korea's financial watchdog, the Financial Services Commission (FSC), said
earlier in the day that the country will ban short selling of stocks for the time
being as part of efforts to minimize the fallout from the rejected U.S. financial
bailout. The watchdog added that it will also raise the daily limit on share
repurchases to 10 percent from the current 1 percent.
Blue chips lost ground across the board, with steel and machinery shares falling
the most. Top steelmaker POSCO declined 2.64 percent to 442,000 won and Shinhan
Financial Group, the country's No. 2 financial services company, fell 1.99
percent to 41,900 won.
But automakers reversed earlier falls on expectations that a weaker won would
boost exports of cars. Top carmaker Hyundai Motor gained 1.24 percent to 73,500
won and its rival Kia Motors advanced 2.81 percent to 14,650 won.
The local currency closed at 1,207 won to the dollar, down 18.2 won from Monday's
close as investors were spooked by the U.S. Congress' rejection of an emergency
rescue plan, dealers said.
It was the lowest level since May 29, 2003, when the local currency finished at
1,207 won against the greenback. The won has lost more than 22 percent versus the
dollar so far this year, putting upward pressure on already-high inflation.
South Korea's currency market has been suffering from a dollar shortage, as banks
and companies are rushing to the safer greenback on concerns over a financial
crisis sparked by the collapse of investment giant Lehman Brothers Holdings Inc.
sooyeon@yna.co.kr
(END)
The benchmark Korea Composite Stock Price Index (KOSPI) fell 8.3 points, or 0.57
percent to 1,448.06. Volume was moderate at 399.2 million shares worth 5.37
trillion won (US$4.45 billion), with losers outpacing gainers 549 to 247.
"An unexpected rejection of the bail-out plan severely hurt investor sentiment,
sending the KOSPI below the 1,400-mark at one point. But institutional buying and
the financial regulator's plans to impose a ban on short selling of stocks helped
pare earlier sharp losses," said Bae Sung-young, an analyst at Hyundai
Securities.
The KOSPI tumbled 5.47 percent at one point in the morning session, weighed by a
selling spree by foreign investors. Offshore investors unloaded a net 126 billion
won worth of local stocks on the Seoul bourse.
On Monday, the U.S. House of Representatives turned down the government-led $700
billion emergency rescue proposal designed to buy bad debts from financial
institutions. The decision sent shockwaves across the globe, raising fears that
instability in the financial sector could cascade into the real economy. The Dow
Jones industrial average sank 6.98 percent and the tech-dominated Nasdaq
composite index crashed 9.14 percent.
South Korea's financial watchdog, the Financial Services Commission (FSC), said
earlier in the day that the country will ban short selling of stocks for the time
being as part of efforts to minimize the fallout from the rejected U.S. financial
bailout. The watchdog added that it will also raise the daily limit on share
repurchases to 10 percent from the current 1 percent.
Blue chips lost ground across the board, with steel and machinery shares falling
the most. Top steelmaker POSCO declined 2.64 percent to 442,000 won and Shinhan
Financial Group, the country's No. 2 financial services company, fell 1.99
percent to 41,900 won.
But automakers reversed earlier falls on expectations that a weaker won would
boost exports of cars. Top carmaker Hyundai Motor gained 1.24 percent to 73,500
won and its rival Kia Motors advanced 2.81 percent to 14,650 won.
The local currency closed at 1,207 won to the dollar, down 18.2 won from Monday's
close as investors were spooked by the U.S. Congress' rejection of an emergency
rescue plan, dealers said.
It was the lowest level since May 29, 2003, when the local currency finished at
1,207 won against the greenback. The won has lost more than 22 percent versus the
dollar so far this year, putting upward pressure on already-high inflation.
South Korea's currency market has been suffering from a dollar shortage, as banks
and companies are rushing to the safer greenback on concerns over a financial
crisis sparked by the collapse of investment giant Lehman Brothers Holdings Inc.
sooyeon@yna.co.kr
(END)
