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KOSPI Falls 82 Points in Three Days

Posted May. 17, 2006 07:04,   


The stock market index plunged for three consecutive days, falling back down below the 1,400-won mark.

Stock markets in not only Korea but also around the globe all slumped as concerns of inflation spread from surging international commodities prices and a further hike in the United States’ interest rate.

The benchmark Korea Composite Stock Price Index (KOSPI) slipped 31.87 points, or 2.25 percent, from the previous day to end at 1,382.11 on May 16. The KOSDAQ also dropped 13.16 points, or 1.95 percent, to close at 662.14.

Since hitting a record-high on May 11, during the three business days from May 12, the KOSPI has lost a total of no less than 82.59 points, which is 5.64 percent.

In the same period, its market capitalization was cut back by 39.825 trillion won.

On May 16, foreign investors led the stock price tumble by making around 350 billion won worth of net sales (purchases subtracted from sales). In the 13 days from April 25, they made a net sale of 2.95 trillion won.

Experts cite as the reasons behind the selling, worsening conditions including a rise in the U.S.’ interest rate, upsurge in commodities prices, and a falling exchange rate. They say the foreign investors are realizing their profits seizing the chance as Samsung Electronics, POSCO, and KT are buying up treasury stocks.

Stock markets in not only Asia but across the world were all in bad form.

The same day saw the Nikkei Stock Average fall by 1.99 percent (328.49 yen), Hong Kong’s Hang Seng index by 0.62 percent, or 101.73 points, and Taiwan’s stock price index by 1.48 percent, or 106.45 points.

The stock markets of Russia and Brazil, labeled the emerging market leaders, also slipped 11.8 percent and 6.4 percent respectively during the past four days.

Im-Sook Ha artemes@donga.com