Jittery Stock Market Falls Below 1,600

The Korean stock market yesterday fell below the 1,600 level in declining for the second straight day, and the won grew weaker versus the U.S. dollar.

Experts blamed growing jitters over the global financial sector and the downturn in the U.S. and Japanese stock markets.

The benchmark Korean stock index KOSPI fell 23.86 points (1.48 percent) to close at 1,585.85, following its sudden fall of 39.82 points (2.41 percent) Wednesday. Foreign investors sold stocks worth 460 billion won (385.6 million U.S. dollars) yesterday as their net selling exceeded 700 billion won (586.8 million dollars) over two days.

Other stock markets in Asia also tumbled. Japan’s Nikkei 225 dropped 183.95 points (1.83 percent) to close at 9,891.1, falling below 10,000 for the first time in a month. Similarly, Hong Kong’s Hang Seng index slid 3.08 percent and China’s benchmark Shanghai Composite Index fell 2.34 percent.

Experts said investor confidence has weakened as the number of new U.S. home sales fell to 402,000 last month, far below the 440,000 analysts had forecasted. The Dow Jones industrial average slid 1.21 percent and the NASDAQ index fell 2.67 percent Wednesday.

The instability of global stock markets has fueled preference for safer assets, so the dollar has strengthened. On the Seoul foreign exchange market, the won-dollar exchange rate rose to 1,196, up 0.6 point from Wednesday. The rate soared to 1,206 at one point in intra-day trading.

artemes@donga.com