Posted October. 20, 2005 06:16,
With foreign investors are on a selling spree, stock prices have plummeted to their lowest level this year.
As they exchanged their won into dollars after selling their stocks and forwarding the money to their home countries, the exchange rate neared its highest point this year.
The Korean Composite Stock Price Index on October 19 dropped 30.09 points (2.79 percent) from yesterdays close to 1,153.13. Both the value and the percent decrease are the highest this year.
The Kosdaq index also closed at 573.19, a decrease of 18.54 points (3.14 percent).
Net sales by foreigners worth 278.3 billion won led to the drop in the stock prices (net sales refer to total selling price minus the purchase price). Since September 22 over 19 consecutive days, their net sales have totaled 2.7368 trillion won.
Meanwhile, the Producer Price Index (PPI) recorded its highest increase rate in 31 years as of September in the United States. It was negatively impacted by the projection that the FRBs interest rates would further increase.
On the same day, stock prices around Asia, including Japan, Taiwan, and Hong Kong, plummeted along with Koreas due to the foreigners selling spree.
At the Seoul foreign exchange market, because of the strong U.S. dollar and foreigners massive stock selling, orders to buy the Korean won rose, resulting in the third consecutive day with an increase in the won-dollar exchange rates.
On the day, the exchange rate closed at 1054.8 won, an increase of 3.3 won from the previous day, nearing 1058.8 won, the highest level this year (as of January 6).