[THE INVESTOR] Korean shares suffered their biggest daily loss this year falling by more than 3 percent while the currency plunged to a 5-year low against the US dollar on June 24 following Brexit concerns.
The country’s benchmark Korea Composite Stock Price Index shed 61.47 points, or 3.09 percent, to 1,925.24. From a session earlier, the Korean won fell 28.70 won, or 2.6 percent, against the greenback to trade at 1,179.90 won.
Analysts expected increased volatility in the domestic stock and currency markets as Britain voted to withdraw from the EU.
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Yoon Byung-chan/The Investor |
“The Brexit decision will have an impact on the local markets for the rest of the year. There will be a growing demand for further rate cuts, extra spending and stimulus packages to support the economy,” KDB Daewoo Securities analyst Yoon Yeo-sam said.
The government and the Korea Exchange, the operator of the country’s main stock exchange, held an emergency meeting on Friday afternoon to discuss ways to cope with capital outflows and financial volatility.
“The government will be ready to take preemptive measures to stabilize the markets if excessive and sudden volatility arises,” Financial Services Commission chairman Yim Jong-yong said.
The main index opened up at 2,001.55 but turned lower on late Friday morning as early vote results showed a tight race.
Britain’s decision to leave the 28-nation bloc was not widely expected until vote counting started. Polls conducted after the murder of pro-EU lawmaker Jo Cox last week indicated the “remain” camp was ahead of the “leave” camp.
Most large-cap stocks declined across the board.
Market bellwether Samsung Electronics shed 2.10 percent to 1,400,000 won, top carmaker Hyundai Motor fell 1.06 percent to 139,500 won, and state utility Korea Electric Power Corp. declined 1.88 percent to 57,400 won.
(
theinvestor@heraldcorp.com)
