SEOUL - Seoul shares are set to fall on Tuesday after big overnight losses on Wall Street on worseningfears about U.S. financials after insurer AIG posted a record quarterly loss, with eyes also on the sliding won.
Things are going from bad to worse. The won is plunging,
which does far more harm than good as there are a lot more
companies carrying foreign currency debts than there are
beneficiaries of a weaker won, said Lee Jae-mahn, a market analyst at Tong Yang Securities.
The U.S. financial sector is also a big mess. I don't think
anyone knows for sure how many more bailouts financial
institutions will need (and) the uncertainty is weighing heavily on sentiment, Lee said, adding that the main index could fall below 1,000 in the near future.
American International Group Inc posted a record $61.7 billion quarterly loss on Monday and got a new but not
necessarily final government bailout.
Meanwhile the won hit an 11-year low against the dollar on Monday. Traders said late on Monday that South Korea's
foreign exchange authorities sold an estimated up to $1 billion to help the currency curb its losses.
But easier oil CLc1, which dropped 10 percent overnight,
may help lift some issues sensitive to energy prices, such as Korean Air Line.
The Korea Composite Stock Price Index ended
down 4.16 percent at 1,018.81 points on Monday, its lowest closesince early December.