SEOUL: South Korean stocks tumbled 1.44 percent Tuesday as investor sentiment worsened amid growing expectations for a rate hike in the United States following the latest brisk jobs data, analysts said. The local currency gained against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 29.11 points to 1,996.59, the lowest level since Oct. 6, when it dropped to 1990.65 points. Trading volume was light at 407.24 million shares worth 5.36 trillion won (US$4.63 billion), with losers far surpassing winners 692 to 149.
“The downward trend intensified from yesterday as investors took more time to digest the concerns over a U.S. rate hike,” said Bae Sung-jin, an analyst at Hyundai Securities. “Overnight setbacks in the U.S. served as a catalyst for the plunge here.”
Experts had shared views that the U.S. might not raise its near-zero borrowing cost this year given the slowing economic growth in China, but the recent jobs data in the U.S. bolstered expectations that a rate hike could come as early as December.
The renewed concerns spooked investors in the U.S., where the Dow Jones industrial average dropped 1 percent Monday. A rate hike is feared to prompt an exodus of foreign capital out of emerging markets and experts worry that South Korea could be affected by massive capital outflows.
Institutions led the bearish mood by selling nearly 170 billion won worth of local shares, and foreigners’ net stock sell-offs came to some 68 billion won.
Large caps lost ground across the board, with tech and steel issues among marked decliners.
Samsung Electronics shed 1.71 percent to 1,321,000 won, while leading Internet portal operator Naver lost 2.52 percent to 618,000 won.
