The Korean benchmark KOSPI Composite Index opened weak as key stocks crashed in early trading as investors turned jittery following a severe setback on Wall Street. Bank, auto, tech, steel, energy and oil stocks are down with sharp losses. Shares of shipbuilders are trading mixed.
The benchmark, which opened at 1,308 edged up a bit to 1,319 but has drifted down to 1,311 now, down nearly 26 points from its previous close.
Bank stocks Korea Exchange Bank, Woori Finance and Shinhan Group have lost between 2.8% and 4.6%. Steel makers Posco and Hyundai Steel are down by 4% and 3.35% respectively.
Auto majors Kia Motor and Hyundai Motor are down 1.9% and 2.6% respectively. Ssangyong Motor is up nearly a percent. Tech stock Hynix Semiconductor is trading lower by 3.5%. Oil stocks S. Oil and SK Holdings and energy stock Kepco are also down in the red with sharp losses.
Bank of America beat market forecast by reporting better earnings but a significant increase in loan loss protection triggered heavy selling in financial stocks on Wall Street. The bank's credit loss provisions went up almost $7 billion to $13.4 billion in the first quarter.
Sun Microsystems had a splendid outing after Oracle announced it would acquire the company for $9.50 per share, a premium of over 40% to the stock's closing price last week. The intensity of selling was so severe that the Dow Jones Industrial Average and the Nasdaq went crashing by as much as 290 points and 65 points, respectively.
Crude oil plummeted nearly 9% on the New York Mercantile Exchange on Monday amid further concerns over energy demands. Light sweet crude for May delivery dropped $4.45 to $45.88 per barrel, posting its lowest close in five weeks and falling below a trading range that lasted nearly a month.
In the previous trading session, most of the Asian markets had bounced back sharply after initial weakness.
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