Shares down on deepening U.S. fiscal woes, recession

South Korean stocks retreated 0.53 percent Friday as deepening U.S. fiscal woes and concerns about a possible economic recession in the world’s largest economy continued to dent confidence here, analysts said. The local currency fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index lost 9.89 points to close at 1,860.83. Trading volume was moderate at 459.1 million shares worth 3.99 trillion won ($3.66 billion) with decliners outpacing gainers 582 to 240.

“Investors are aware about the amount of tax hikes and spending cuts that will come in as planned on Jan. 1. They know that the U.S. economy will be affected by the fiscal cliff to some extent,” said Cho Byung-hyun, an analyst at Tongyang Securities Inc.

“But the problem is that investors still feel worried about the fiscal cliff as political considerations can change many things.

Political leaders, who are working to reach a deal to avert it, can have the U.S. economy tip into recession, or even make a turnaround.” (Yonhap News)