Posted October. 24, 2008 08:35,
Asian stocks nosedived yesterday on widespread fears over the aggravating global financial crisis and the looming specter of recession.
The Korean financial market was hit harder, with its benchmark KOSPI tumbling below 1,100, half its peak of 2,086.45 on Nov. 1 last year. The won also plummeted to the 1,400 level against the greenback.
The tech-heavy KOSDAQ also nosedived to a record low.
The plummeting value of the won and plunging stocks have fueled fears of a three-digit stock index and a won-dollar rate of 1,500.
The KOSPI dropped 84.88 points (7.48 percent) to close at 1,049.71, the lowest since 1,043.88 on July 12, 2005.
The index nosedived 45.02 points (3.97 percent) to fall under 1,100 as soon as the market opened. Fifty minutes into the opening, the index shed 90 points.
The plunge came after institutional investors began dumping Korean stocks. The state pension fund came to the rescue by net buying shares worth 189.4 billion won (134 million U.S. dollars). Brokerages and asset management firms, however, net sold 256 billion won (182 million dollars) worth of shares, closing the trading with net selling of 66 billion won (47 million dollars). Foreign investors continued their selling spree for the seventh straight day, net selling 100.5 billion won (71 million dollars) in domestic shares.
Steep losses both in the KOSPI and the tech-heavy KOSDAQ in the morning prompted the use of the sidecar, or trading suspension of five minutes, to cool the market. For the third time in KOSDAQ history, a circuit breaker suspended trading for 20 minutes as shares plunged 10 percent from the previous days close for more than one minute.
Samsung Electronics, the worlds largest memory chipmaker, tumbled 35,500 won or 6.99 percent won to below 500,000 won (472,500 won), its lowest in three years and three months.
The KOSDAQ shed 26.58 points, or 7.92 percent, to close at 308.95, its lowest finish since Aug. 4, 2004, when it posted 324.71.
Asian stocks also tumbled. Japans Nikkei 225 plunged 213.71 points or 2.46 percent to 8,460.98. It plummeted 658 points to near the 8,000 level in the morning, but narrowed its losses as the yen lost value in the foreign exchange market.
Chinas benchmark Shanghai Composite Index dropped 1.07 percent to close at 1,875.56, after continuing to fall more than two percent since the Chinese government announced tax cuts from Nov. 1.
Hong Kongs Hang Seng dropped 3.55 percent and Taiwans Taiex fell 2.72 percent.
The won plunged 45.8 points to close at 1,408.80 to the dollar, down 93.8 points over the past three trading days. The currency fell to its lowest level since June 17, 1998, and tumbled below 1,400 for the first time since Sept. 23, 1998. The won also lost value against the yen, falling 74 points to close at 1,400 per 100 yen, the lowest in 10 years and 10 months.