South Korean stocks ended 0.87 percent lower on Monday as a massive eurozone credit ratings cut battered investor sentiment, raising fears the region is far off from solving its debt crisis, analysts said. The local currency fell against the U.S. dollar.
After tumbling as much as 1.7 percent at one point, the benchmark KOSPI closed down 16.41 points at 1,859.27. Trading volume was moderate at 382.9 million shares worth 3.88 trillion won ($3.36 billion), with decliners outnumbering gainers 586 to 244.
“The ratings action on the nine eurozone countries hurt investor sentiment amid nagging concerns over the regional debt crisis,” said Park Sung-hoon, an analyst at Woori Investment & Securities Co.
On Friday, Standard & Poor’s Ratings Services downgraded its sovereign ratings for nine eurozone economies, including those with top-notch ratings such as France and Austria.
Park, however, said the impact was limited compared with the reaction seen after the first-ever ratings cut of the U.S. or the death of former North Korean leader Kim Jong-il, which rattled the local stock market last year.
“Although uncertainties remain, it seems the market is unlikely to suffer from heightened volatility, given signs of recovery in the U.S. economy and relatively calm market reaction,” he said.
Shares lost ground across the board with blue-chip exporters leading the decline.
Market bellwether Samsung Electronics dropped 1.53 percent to 1,030,000 won and leading automaker Hyundai Motor slipped 0.66 percent to 226,000 won.
Banks and financial firms also landed in negative territory on concerns the ratings action may hurt the region’s banking sector and prompt a liquidity squeeze. No. 3 banking group Shinhan Financial Group lost 2.14 percent to 38,800 won and major brokerage Samsung Securities shed 0.98 percent to 50,600 won.
In contrast, some shipbuilders outperformed the market. Samsung Heavy Industries rose 3.53 percent to 33,700 won after winning a $2.26 billion deal to build an offshore gas processing facility for a Japanese company.
The local currency closed at 1,154.7 won against the greenback, down 6.4 won from Friday’s close, as investors opted to snap up relatively safer assets amid persistent eurozone woes, dealers said.
(Yonhap News)
