Posted November. 21, 2008 18:38,
Amid growing fears over the unstable global financial market and the contraction of the real economy, Korean stock prices and the won-dollar exchange rate yesterday plummeted to their levels on Oct. 30, when a currency swap agreement was reached between Korea and the United States.
The financial market faced turmoil again as the benchmark stock index KOSPI plunged below the 1,000 mark and the won inched closer to 1,500 to the greenback in reaching a ten-year low in value.
The stock market nosedived 68.13 points (6.7 percent) to close at 948.69, its eight consecutive day of fall and its lowest close since Oct. 28 (999.16), two days prior to the swap deal. Though institutional and individual investors were net buyers, the selling spree of foreign investors ultimately pushed down share prices.
The tech-heavy KOSDAQ also fell 24.35 points (8.19 percent) to close at 273.06.
On the foreign exchange market, the won-dollar rate plunged 50.5 points to close at 1,497 in Seoul, the weakest level for the Korean currency since March 13, 1998 (1,521 won). The dollar had surged as high as 1,517 to the won at one point in trading.
Analysts blamed the fall on the Wall Street tumble the previous day over fears of a real economy slump and the dispute over the rescue plan for the U.S. auto industry.
The Dow Jones average fell 427.37 points (5.07 percent) to close at 7,997.28 Wednesday, falling below 8,000 for the first time since March 31, 2003.
Fears over a slump in the U.S. real economy grew after the Federal Open Market Committee predicted that the slowdown could continue for more than one year.
The committee lowered its growth forecast for U.S. GDP next year from between two and 2.8 percent to 0.2 and 1.1 percent.
Asian stock prices also plummeted all across the region. Japans Nikkei fell 6.89 percent, Taiwans TAIEX 4.53 percent and Chinas Shanghai Main Index 1.67 percent.