Shares fall 1.37 % on Spain, Greece woes
Korean stocks hit a yearly low on Wednesday as worries over debt-mired Spain and Greece further weighed on investor sentiment already dampened by a worsening global economy, analysts said. The local currency lost ground against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) retreated 24.62 points to 1,769.31, the lowest close for the year. Trading volume was moderate at 460.9 million shares worth 3.77 trillion won ($ 3.27 billion) with decliners far outpacing advancers 678 to 171.
"Investors started to feel that the eurozone crisis is spreading to other parts of the world and believe in the scenario that the global slowdown is really happening," said Park So-yeon, an analyst at Korea Investment & Securities Co.
Spanish debt yields have hiked to more than 7 percent, while the European Union officials said Greece seems to be far from being able to meet the requirements to get its rescue funds.
"It's also worth noting that earnings reports from the U.S. companies have been bad, so we are witnessing the two economic major power regions suffering at the same time," Park added.
Worse-than-expected earnings by Apple Inc. sent local tech firms to finish in negative territory, with electronic parts maker LG Innotek plunging 4.57 percent to 77,300 won and flat panel giant LG Display slumping 4.75 percent to 21,050 won.
Affiliates of STX, the country's shipbuilding and shipping conglomerate tumbled. STX Offshore & Shipbuilding fell 5.43 percent to 8,540 won and its bulk shipping unit STX PanOcean dropped 4.63 percent to 3,605 won.
Underperforming the industry, shares of No. 4 lender Shinhan Financial slid 2.49 percent to 33,350 won, after it said it sold treasury stocks worth 3.7 billion won.
The local currency ended at 1,151.20 won against the greenback, down 5.1 won from Tuesday's close, as foreigners opted to offload their holdings of local shares on concerns over the deepening global downturn, dealers said.
Bond prices, which move inversely to yields, closed sharply higher. The yield on three-year Treasuries slid 0.05 percentage point to 2.78 percent and the return on the benchmark five-year government bonds fell 0.06 percentage point to 2.86 percent. (Yonhap)