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S. Korean shares crash more than 2 pct on North's nuke test, Samsung

All News 16:17 September 12, 2016

SEOUL, Sept. 12 (Yonhap) -- South Korean shares sank 2.28 percent Monday to hit an almost three-month low, as investors were spooked by continued setbacks in the global market and growing geopolitical tensions following North Korea's nuclear test, as well as a sharp drop in top market cap Samsung Electronics, analysts said. The local currency fell sharply against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) dropped 46.39 points to 1,991.48. Trading volume was moderate at 41.87 million shares, worth 4.75 trillion won (US$4.26 billion). Losers outnumbered gainers 635 to 185.

It marks the biggest fall since June 24 when the index shed 3.09 percent, or 61.47 points, following the Brexit.

The European Central Bank (ECB) did not roll out much-awaited boosting measures last week while a U.S Federal Reserve Bank official spurred speculations that an interest rate hike in the world's largest economy is imminent.

U.S. stocks closed lower Friday, with the Dow Jones industrial average dropping 2.5 percent, the biggest fall since Great Britain's decision to exit the European Union.

Adding to woes, North Korea ramped up regional tensions last week by conducting its fifth nuclear test in defiance of international pressure to stop its nuclear program.

"Global financial market is likely to be exposed to variables for some time," said Lee Kyumg-min, an analyst at Daeshin Investment & Securities, noting that various negative factors from both home and abroad could further affect the market.

Top market cap Samsung Electronics sank 6.98 percent to end at 1,465,000 won out of concerns that its global recall of the Galaxy Note 7 may sharply dent its earnings down the road.

Earlier, Samsung announced an unprecedented global recall of its flagship smartphone after several of the phablets caught fire while being charged, promising to offer replacements to all buyers at home and abroad.

But a U.S. product safety agency has urged the users of the phablet to turn them off due to fire risks, and aviation authorities around the globe banned in-flight use of the device.

Naver, the top Internet portal operator, inched down 0.83 percent to 840,000 won, and SK hynix, a major chipmaker, sank 5.01 percent to 37,000 won.

Cosmetics maker AmorePacific fell 1.67 percent to 383,500 won, while steelmaking giant POSCO shed 3.02 percent to 224,500 won.

The local currency closed at 1,113.5 won against the greenback, down 15.10 won from the previous day's close.


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