SEOUL: South Korean stocks tumbled 2.4 percent to a two-week low Monday as a Greek referendum against austerity measures proposed by its international lenders clouded the future of the eurozone and reduced investors’ appetite for risky assets, analysts said. The local currency declined against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) lost 50.48 points to close at 2,053.93. Trading volume was moderate at 463.9 million shares worth 6.3 trillion won (US$5.6 billion) with losers far outnumbering winners 669 to 164.
“More than 60 percent of Greek people voted against the austerity measures demanded by creditors, reversing earlier polls that the ‘yes’ camp would win,” said Kim Hyung-rae, an analyst from KDB Daewoo Securities Co. “The result raises concerns about Greece’s potential exit from the eurozone economy and fuels volatility in the global financial market.”
He said South Korea is not the only country that is affected by the Grexit issue, but nearly all emerging markets are bearing the brunt.
Investors are worried about the future of the single currency union if Greece actually goes out of the eurozone. “Due to the uncertainty, investors turn their eyes to safer assets,” said Kim.
Foreign investors offloaded a net 286.4 billion won worth of local shares, while institutional investors dumped a net 217.3 billion won.
