 |
A currency dealer works in the dealing room of the Korea Exchange Bank headquarters in Seoul on Tuesday. The KOSPI closed at 1,886.85, 1.72 percent lower than the previous trading day. (Lee Sang-sub/The Korea Herald) |
Stock prices dipped below 1,900 points for the first time in more than five months amid the ongoing selling streak of foreign investors on mounting market jitters in a growing number of emerging economies.
The Korea Composite Stock Price Index closed at 1,886.85 on Tuesday, down 33.11 points from a trading session before.
After bottoming out at 1,884.52 on Aug. 28, the benchmark KOSPI ranged between 1,900 and 2,050 points over the past five months.
Foreigners, who have massively been pulling their funds out since late January, net sold shares worth 660 billion won ($600 million) on the main bourse.
The overseas investors’ net-selling on Monday and Tuesday came to 1 trillion won, while their net-selling over the past seven trading sessions surpassed 2 trillion won.
On the main bourse, Samsung Electronics and Hyundai Motor fell by 23,000 won and 5,500 won, respectively, to close at 1.249 million won and 226,000 won.
In the over-the-counter KOSDAQ market, foreigners also net sold shares worth 14.5 billion won, which closed at 507.56, down 6.06 points from a session earlier.
Analysts said investors are on alert over worse-than-expected economic indices in China as well as the U.S. policymakers’ measure to scale back its three-year-long stimulus package.
The currency market was also volatile, although the U.S. dollar inched down 0.7 won to close at 1,083.3 won on Tuesday.
The Korean currency, which has been strong against the dollar over the past year with the exchange rate floating between 1,050 won and 1,060 won, has recently lost ground against the greenback.
Samsung Futures research analysts said it seems that more investors prefer safe-to-invest currencies such as the dollar to emerging countries’ currencies amid widening global uncertainties.
Economists as well as policymakers warn that the U.S. tapering is expected to further increase Korea’s household borrowing costs and pose a systemic risk to the real economy due to an increase in interest rates worldwide.
Korean households, which have accumulated some 1 quadrillion won of outstanding debt, are to see their repayment burden rise from possibly higher interest rates in the local market once the U.S. Federal Reserve begins normalizing its monetary policy.
By Kim Yon-se (
kys@heraldcorp.com)
