Seoul shares tumble 2.73 pct on growing concerns over crisis

(ATTN: ADDS bond yields at bottom)
SEOUL, Oct. 17 (Yonhap) -- South Korean stocks tumbled to a three-year low on Friday as investors dumped shares amid concerns that the recent financial meltdown could lead to a worldwide economic recession, analysts said.

The won rose sharply against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 33.11 points or 2.73
percent to 1,180.67, continuing a three-day losing streak and marking the lowest
level since Oct. 31, 2005. Volume was heavy at 411.93 million shares worth 6.42
trillion won (US$4.81 billion), with losers outpacing gainers 471 to 364.
"The global financial crisis and a possible worldwide economic recession dented
already-fragile investor sentiment," said Kim Jung-hyun, an analyst at
Goodmorning Shinhan Securities. "Panic is spreading that South Korea might fall
victim to the ongoing financial fiasco."
Local stock markets capped one of the most turbulent weeks in history with the
main index tossing up and down, responding nervously to daily economic
developments. Over the past three days, the index has lost around 14 percent on
massive foreign sell-offs following sharp surges on Monday and Tuesday.
With heightened concerns over financial and economic conditions, Finance Minister
Kang Man-soo said that the government will announce sweeping measures aimed at
stabilizing financial markets on Sunday.
Financial shares led the market downswings. Second-ranked financial service
provider Shinhan Financial Group plunged 8.8 percent to 33,700 won and Hana
Financial Group fell by its daily limit of 14.88 percent to 20,300 won.
Shipyard and shipping shares were also severely dented. Leading shipbuilder
Hyundai Heavy Industries dived 11.02 percent to 165,500 won following its daily
limit plunge of 14.87 percent a day earlier. Shipping giant Hanjin Shipping also
fell 9.33 percent to close at 17,500 won.
Tech exporters closed mixed. Chipmaking giant Hynix Semiconductor was down 2.28
percent at 15,000 won, while Samsung Electronics inched up 0.2 percent to 505,000
won.
The downswings came despite the overnight rebound on Wall Street from the
previous day's dive. The Dow Jones industrial average closed up 4.68 percent and
the tech-dominated Nasdaq composite index also advanced 5.49 percent.
The local currency gained ground as investors remained cautious about a possible
government intervention to ease its slide. The won ended at 1,334 won to the U.S.
dollar, up 39 won from a day earlier. It was a reversal from Thursday's 133.5 won
dive, the biggest drop in almost 11 years.
Bond prices, which move inversely to yields, soared. The return on three-year
Treasuries plunged 0.24 percentage point to 5.03 percent and the benchmark yield
on five-year government bonds also lost 0.22 percentage point to 5.08 percent.
kokobj@yna.co.kr
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