SEOUL: South Korean stocks closed 0.75 percent lower Monday as jitters about the yuan devaluations prodded investors into dumping risky assets, analysts said. The local currency fell sharply against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) retreated 14.94 points to finish at 1,968.52, the lowest close since Feb. 23. Trading volume was high at 555.3 million shares worth 4.56 trillion won (US$3.85 billion), with decliners far outstripping gainers 524 to 282.
“The possibility of an additional yuan depreciation is very low for now since the People’s Bank of China made clear that it won’t devalue it further. But it is still risky to Asian emerging markets with big exposure to China,” said Han Yo-seop, an analyst at KDB Daewoo Securities Co.
The global markets were rattled last week after China devalued its currency against the dollar by 4.7 percent from Tuesday to Thursday.
A weaker yuan is a disadvantage for Korean companies that vie with Chinese firms in the global market as it undermines their price competitiveness.
