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Korean Stock Market Plunges 2.6 Pct.

Posted May. 18, 2010 04:42,   


The Korean financial market plunged Monday as rumors that Japan’s sovereign credit rating could drop compounded reemerging debt fears in southern European countries.

Korea’s benchmark stock index KOSPI plummeted and the Korean won’s value sharply fell against the U.S. dollar, dampening investor confidence. The KOSPI closed at 1,651.51, down 2.6 percent or 44.12 points from Friday as foreign investors net sold shares worth 760 billion won (658.8 million dollars). Foreigners have net sold 3.9 trillion won (3.3 billion dollars) on the Korean market this month. The won-dollar exchange rate rose 23.30 points, or 2.06 percent, to 1,153.80.

Other Asian stock markets all plummeted in unison. China’s Shanghai Composite Index fell 5.07 percent and Japan’s Nikkei dropped 2.17 percent.

Though the European Union and the International Monetary Fund agreed on a bailout fund of 750 billion euros, instability has spread as worker protests against government austerity measures rocked Spain as well as Greece.

Investor confidence also waned as eurozone countries began tightening their budgets, casting doubt over economic recovery on the continent.

artemes@donga.com jaeyuna@donga.com