RTTNews - The Korean market opened weak and lost further ground in subsequent trades on Tuesday, with investors taking cues from Wall Street and other Asian markets and indulging in some heavy selling across the board.
With the World Bank predicting a sharper contraction for the global economy, the mood across Asia has turned extremely negative today. The Korean benchmark index KOSPI, which dropped down to 1,358.80, is currently trading at 1,362, down by around 38 points or 2.8% from its previous close. On Monday, the KOSPI had ended at 1,400, recording a gain of 16.37 points, or 1.18%.
Bank stocks are among the wost hit in the sell-off today. Woori Finance is down by as much as 4%. Korea Exchange Bank, Shinhan Financial and KB Financial are trading lower by 3%-3.5%.
Steel stocks Hyundai Steel and POSCO are down by 2% and 3.6% respectively. In the oil space, SK Holdings is down with a 3.7% loss and S-Oil is trading 1.5% down. Energy stock KEPCO is trading lower by 2.8%.
Shares of shipbuilding firms are down in the red with sharp losses. While Samsung Heavy Industries is down by 2.2%, Hyundai Heavy Industries and Daewoo Shipbuilding are trading lower by over 3%. Shares of bulk carrier STX Pan Ocean have plunged 5.6%.
In the automobile space, Kia Motor and Hyundai Motors are trading weak, while Ssangyong Motor is up with a modest gain. Airlines and telecom stocks are trading sharply lower. Among technology stocks, LG Electronics is down by about 3%. Hynix Semiconductor is down with a modest loss, while Samsung Electronics and LG Display LCD are trading modestly higher.
Among other markets in the Asia-Pacific region, Australia, Hong Kong, Indonesia and Japan are trading sharply lower with their benchmark indices down by over 3%. Shanghai, New Zealand, Singapore and Taiwan markets are also trading with sharp losses today.
Most of the markets in the Asia-Pacific region had ended Monday's session with moderate gains.
On Wall Street, stocks tumbled after the World Bank cut its forecast for the global economy and warned of a large decline in international capital flows amidst the financial market fragility. The World Bank said it now expects the world economy to shrink by 2.9 percent this year, larger than its earlier prediction of a 1.7 percent decrease.
The Dow closed lower by 200.72 points or 2.4 percent to 8,339.01, the Nasdaq fell by 61.28 points or 3.4 percent to 1,766.19 and the S&P 500 dropped 28.19 points or 3.1 percent to 893.04.
Major European markets closed firmly on the downside. The French CAC 40 Index and the German DAX Index both finished down by 3 percent, while the U.K.'s FTSE 100 Index dropped by 2.6 percent.
On Monday, crude oil plunged to its lowest close in 19 days as the World Bank's discouraging economic forecast led to worries over energy demand. Light sweet crude fell to US$66.93, a drop of US$2.62 for the session. Prices hit as low as US$66.25. The more-actively traded August crude contract fell US$2.52 to US$67.50 per barrel.
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