The stock market in Seoul declined 3.24% or 40.05 points, to close at 1,197, paring most of the gains made during the past few trading sessions. Financial and automakers led the weakness following a negative close on Wall Street on Friday.
Financial stocks slipped after U.S. Treasury Secretary stated that big banks might need much more assistance than anticipated. Automobile stocks also declined after the U.S. government stated that bankruptcy might be the best solution for troubled automakers in the country, including General Motors, whose CEO Wagoner has been forced to quit the job. .
The markets, having opened slightly higher on Monday morning, slipped into negative territory on profit taking and continued to move southward and closed near the day's low.
The benchmark KOSPI Index slipped 3.24% or 40.05 points to close at 1,197.46.
The Central Bank of Korea revealed today that the current account balance for February 2009 swung to a surplus of US$3.68 billion from a revised deficit of US$1.64 billion in January 2009. The Bank attributed sharp drop in imports during the month as the primary reason for the surplus and expects to report a record surplus for March 2009 as well.
At the same time, officials in the Ministry of Strategy & Finance revealed that the national debt in the country is expected to increase to as much as 19% this year, as the Government, in an effort to bolster the economy through extra-budget measures, is planning to issue bonds to fund the extra-budget amount. The total national debt, which was at 308.3 trillion won in last year, is projected to increase to 366.9 trillion Won, or US$269.9 billion, during the current year, the officials noted.
Financials dragged down the market indices. KB Financial Group, the holding firm of Kookmin Bank, decreased 6.63%, Shinhan Financial fell 8.99% and Woori Finance moved down by 2.64%.
Automakers ended weak on concerns about the global auto industry after the US administration stated that bankruptcy might be a better option for troubled automakers. Hyundai Motor lost 3.81%, Kia Motor dropped 5.18% and Ssangyang Motor fell sharply by 10.45%.
Shipbuilders ended lower on profit taking. Hyundai Heavy Industries lost 5.71%, Daewoo Ship building fell 4.15%, and Samsung Heavy Industries dropped 5.91%. Market heavyweight Samsung Electronics declined 2.91%.
Oil related stocks moved downwards on lower crude oil prices. S-Oil fell 3.54% and SK Holdings lost 4.91%.
Technology related stocks ended mixed. While Hynix Semiconductor gained 3.33%, LG Electronics fell 2.55% and LG Display lost 4.20%.
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