Posted November. 09, 2012 01:21,
Stock prices in major world economies fell in unison Thursday, the first day of trading since the re-election of U.S. President Barack Obama, on fears over the fiscal cliff of the U.S., automatic tax hikes and spending cuts, and a slowdown in the European economy.
The Korea Composite Stock Price Index, or KOSPI, fell 23.14 points, or 1.19 percent, to close at 1,914.41. Japans Nikkei also went down 1.51 percent to 8,837.15, while Chinas Shanghai Stock Exchange Composite Index also slid 1.63 percent to 2,071.51. On Wednesday, Wall Street plunged more than 2 percent, and main stock indexes in the U.K., Germany and France also declined sharply.
Despite predictions that Obamas re-election would have a positive impact on global financial markets, stock prices fell around the world because investors feared the possibility of the U.S. financial cliff. Because the U.S. government remains divided as a result of the congressional elections that were held simultaneously with the presidential vote, a quick resolution to the cliff issue was deemed improbable.
A potential economic slowdown also looms for Germany, the locomotive of the European economy. On the occasion of Economy Day 2012 in Frankfurt on Wednesday, Central Bank President Mario Draghi said that the German economy was beginning to be affected by the eurozone debt crisis. Fanning such anxiety, the European Commission downgraded its outlook for the eurozones growth rate for next year from 1 percent to 0.1 percent.
A bit of optimism remains for stock markets, however, according to one Korean analyst. Many believe that the U.S. administration will likely reach a compromise with Congress on the fiscal cliff issue, said Song Sang-geun, head of research at Kyobo Securities. The fall of the Korean stock market Wednesday wasn`t very big.
The Korean won`s value versus the greenback fell to 1,089.30 Thursday, up 3.90 points from the previous day, on fears over the fiscal cliff.