Seoul shares nosedive 2% on eurozone crisis

South Korean stocks closed 2 percent lower on Friday as rising borrowing costs in Spain fueled fears that the eurozone debt crisis is spreading, analysts said. The local currency fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 37.5 points to close at 1,839.17. Trading volume was moderate at 328 million shares worth 4.71 trillion won ($4.14 billion) with losers outpacing gainers 631 to 206.

“Jitters about the eurozone debt turmoil battered investor sentiment, sending the global equity markets lower,” said Kwak Joong-bo, an analyst at Samsung Securities.

Foreign investors sold stock futures on the worsening eurozone problems, but pension funds’ buying helped recoup the KOSPI’s earlier losses, he added.

“The Seoul market is expected to undergo high volatility next week as well without clear momentum,” he added.

A hike in yields of Spain’s government bonds spawned concerns that the eurozone debt crisis is hitting major economies in the common currency region.

Foreign investors unloaded a net 411.5 billion won worth of Seoul stocks on the main bourse, the second straight session of sell-offs. The KOSPI dipped as much as 2.37 percent at one point as institutional and foreign investors expanded their selling spree on worries about Europe’s sovereign strains.

Most shares were under selling pressure, led by losses of refiners, steelmakers and bank shares.

A sharp fall in oil prices dealt a blow to refiners on concerns about their margins. Leading refiner SK Innovation shed 3.97 percent to 169,500 won and its rival S-Oil fell 2.95 percent to 115,000 won.

Leading shipyard Hyundai Heavy Industries lost 3.39 percent to 271,000 won and market behemoth Samsung Electronics fell 1.73 percent to 963,000 won.

The local currency closed at 1,138.90 won to the greenback, down 8.2 won from Thursday’s close, as foreign investors unloaded local stocks, dealers said. 

(Yonhap News)