Korean shares plunge 1.85 pct on renewed Brexit woes

Korean shares sank 1.85 percent Wednesday, as fears sparked by Britain's decision to leave the European Union apparently resurfaced, while foreigners tried to partly cash in recent gains. The local currency continued to lose ground against the U.S. dollar for a third consecutive session.

The benchmark Korea Composite Stock Price Index lost 36.73 points to 1,953.12. Trading volume was moderate at 451.69 million shares, worth 4.68 trillion won ($4.01 billion). Losers outnumbered gainers 646 to 165.
The sharp decline also followed overnight losses on Wall Street.

The Dow Jones industrial average lost 0.61 percent to 17,840.62 points Tuesday, with the tech-laden Nasdaq also shedding 0.82 percent to 4,822.90 points.

Local analysts noted growing uncertainties, especially in Western markets, stemming from Britain's vote to quit the European Union two weeks ago.

Reflecting the market jitters, the average price of gold traded on the Seoul bourse came to 50,901 won per one gram, spiking 2.33 percent from the previous session's close and reaching a record high since the gold bourse was launched March 2014.

"The depreciation of the British pound to a 35-year low against the U.S. dollar led to additional uncertainties amid growing political uncertainties and concerns over a possible financial crisis originating from problems facing Italian banks," Korea Investment & Securities analyst Kim Dae-jun said.

"Also in South Korea, there have been several issues that could trigger foreign selling," he added.

Foreign investors dumped 426.5 billion won worth of local stocks, ending a buying streak of five consecutive sessions.

Institutions offloaded a net 138.5 billion won, while retail investors scooped up a net 510.1 billion won.

Most large caps ended in negative terrain. Market bellwether Samsung Electronics plunged 3.27 percent to 1,421,000 won, while top automaker Hyundai Motor tumbled 3.70 percent to 130,000 won.

Cosmetics giant AmorePacific advanced 0.80 percent to 439,500 won, while global chipmaker SK hynix lost 3.92 percent to 30,600 won.

The local currency closed at 1,165.60 won against the U.S. greenback, plunging 10.20 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasury lost 1.4 basis points to 1.203 percent and the return on the benchmark five-year government bond shed 2.2 basis points to 1.245 percent. (Yonhap)