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Seoul shares snap 3-day winning streak amid recession woes; Korean won tumbles

An electronic board showing the Korea Composite Stock Price Index (Kospi) at a dealing room of the Hana Bank headquarters in Seoul on Wednesday. (Yonhap)
An electronic board showing the Korea Composite Stock Price Index (Kospi) at a dealing room of the Hana Bank headquarters in Seoul on Wednesday. (Yonhap)

South Korean stocks snapped their three-day winning streak Wednesday, as investors were spooked by overnight plunges on Wall Street caused by growing concerns about an economic recession. The Korean won tumbled against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) shed 44.1 points, or 1.82 percent, to close at 2,377.99 points.

Trading volume was moderate at about 411 million shares worth some 7.7 trillion won ($5.9 billion), with losers outnumbering gainers 511 to 336.

Institutions sold a net 505 billion won, and foreigners offloaded 226 billion won, while retail investors bought 693 billion won.

Overnight, Wall Street tumbled as bleaker-than-expected economic data intensified investors' concerns about a US economic recession. The Dow Jones Industrial Average dipped 1.56 percent, while the tech-heavy Nasdaq composite sank 2.98 percent.

Taking a cue from the setbacks in the US, Seoul stocks got off to a weak start and extended their earlier losses, following Bank of Korea data showing the country's inflation expectations in June hit the highest level in about a decade.

The data raised market expectations of "big-step" hikes by the central bank in its key interest rates at its July meeting.

"The negative factors from the macroeconomic environment are still weighing (on the stock prices,) especially with the volatility in the foreign currency markets," said Mirae Asset Securities analyst Park Gwang-nam.

Foreign and institutional sell-offs led the KOSPI's losses in most sectors.

Market behemoth Samsung Electronics dropped 2.36 percent to 58,000 won, with No. 2 chipmaker SK hynix losing 1.36 percent to 94,000 won.

Battery giant LG Energy Solution sank 4.63 percent to 391,500 won after a report that its massive investment plan in the US will be delayed due to rising costs.

Internet portal operator Naver moved down 2.38 percent to 246,500 won, and bio heavyweight Samsung Biologics lost 1.72 percent to 801,000 won.

Top carmaker Hyundai Motor plummeted 5.65 percent to 175,500 won, with its smaller affiliate dipping 6.11 percent to 76,900 won. The two carmakers' stock prices tumbled following foreign reports that German prosecutors raided Hyundai's local operations in Germany and Luxembourg for alleged use of defeat devices in diesel vehicles to mask emissions.

The local currency closed at 1,299 won against the US dollar, down 15.6 won from the previous session's close. (Yonhap)

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