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(LEAD) Seoul shares nosedive 3.4 pct on mounting European woes

All Headlines 16:12 May 18, 2012

(ATTN: ADDS bond yields at bottom)

SEOUL, May 18 (Yonhap) -- South Korean stocks plunged 3.4 percent on Friday as Europe's mounting fiscal debt problems sent shock waves through global financial markets, analysts said. The local currency fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) dived 62.78 points to 1,782.46. Trading volume was moderate at 539 million shares worth 5.67 trillion won (US$4.87 billion), with losers clearly outpacing gainers 756 to 136.

"The local bourse was battered by uncertainties surrounding Greece's political situation and mounting concerns over other eurozone economies," said Lim Dong-rak, an analyst from Hanyang Securities Co.

Others said the European crisis is starting to exert negative influence on financial markets worldwide. They said the current problem is compounded by sluggish growth in the United States and China.

Joe Byoung-moon, a senior strategist at Eugene Investment & Securities Co., said the KOSPI will likely be buffeted by overseas uncertainty for at least a month until Greece holds another election in mid-June.

Most shares lost ground with big-cap electronics, auto and steel firms leading the fall.

Market bellwether Samsung Electronics dropped 4.66 percent to 1,166,000 won, with top automaker Hyundai Motor tumbling 4.78 percent to 229,000.

Kia Motors Corp., the country's second-largest automotive company, plunged 5.66 percent to 73,300 won, while LG Chem, a leading manufacturer of rechargeable batteries, lost 1.24 percent to 278,500 won.

Hyundai Heavy Industries, the world's largest shipmaker, shed 2.69 percent to 253,000 won with leading steelmaker POSCO tumbling 2.71 percent to 358,500 won.

Top refiner SK Innovation sank 3.82 percent to 138,500 won with state-run power monopoly Korea Electric Power Corp. shedding 1.09 percent to 22,750 won.

The local currency finished at 1,172.9 won to the U.S. greenback, down a sharp 10 won from Thursday's close, dealers said.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasuries fell 0.03 percentage point to 3.36 percent, and the return on the benchmark five-year government bonds also dropped 0.03 percentage point to 3.47 percent.


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