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SEOUL, May 9 (Yonhap) -- South Korean stocks extended their losing streak to a fourth day Thursday, plunging more than 3 percent, the sharpest drop in almost seven months ahead of two days of trade negotiations between Washington and Beijing. The Korean won also sank to the lowest point in over two years to the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) crashed a whopping 66 points, or 3.04 percent, to close at 2,102.01. Trading volume was high at 729 million shares worth 7.92 trillion won (US$6.71 billion), with losers far outpacing gainers 785 to 83.
The fall was the steepest since Oct. 11, 2018, when the KOSPI dropped 4.44 percent, and marks the lowest point since the 2,097.18 points posted on Jan. 15 this year.
Seoul shares extended losses throughout the session after opening a tad lower in the morning, weighed down by looming concerns that the United States and China could fail to iron out their differences in the upcoming trade negotiations.
In his latest remark on the row, U.S. President Donald Trump claimed on Wednesday (local time) that China "broke the deal," giving yet another harsh blow to the global financial market.
China's delegation is set to meet U.S. officials in Washington on Thursday to work on last-minute efforts to find common ground in their drawn-out trade negotiations.
"Overnight, Wall Street shares also traded higher during the session on hopes over the settlement between the U.S. and China, but they later closed mixed due to uncertainties over the deal," said Seo Sang-young, a researcher at Kiwoom Securities Co.
The U.S. has threatened to raise tariffs on $200 billion worth of Chinese products to 25 percent from the current 10 percent starting Friday.
Foreigners sold more shares than they bought at 185 billion won, with institutions also tossing a net 661 billion won. Retail investors scooped up a net 814 billion won.
Most shares lost ground.
Market kingpin Samsung Electronics nose-dived 4.07 percent to 42,450 won, and No. 2 chipmaker SK hynix plunged 5.35 percent to 76,000 won. Battery maker Samsung SDI dipped 7.11 percent to 222,000 won.
Top carmaker Hyundai Motor decreased 3.32 percent to 131,000 won, and its sister Kia Motors lost 2.05 percent to 43,100 won. Auto parts maker Hyundai Mobis surrendered 4.57 percent to 219,500 won.
Chemical firms finished bearish as well, with industry leader LG Chem falling 3.65 percent to 343,000 won and LG Household & Health Care stepping down 3.61 percent to 1,309,000 won. Top refiner SK Innovation shed 3.98 percent to 169,000 won.
Pharmaceutical firms were among gainers. Leading player Celltrion advanced 2.19 percent to 210,000 won, and Samsung BioLogics rose 0.5 percent to 299,500 won.
In line with the drop in the benchmark index, VKOSPI, the official and representative volatility index for the KOSPI 200, surged to 18.28, up 15.48 percent from the previous day, according to the Korea Exchange (KRX).
The reading marks the highest since April 10, when the comparable figure was 30.40. At one point, it spiked to as high as 19.92.
Derived from informative options prices, VKOSPI represents the market's fear gauge, as it usually moves counter to the stock index.
The local currency closed at 1,179.80 won against the U.S. dollar, plunging 10.40 won from the previous session, the lowest number in 28 months, as investors continued to seek safer assets amid uncertainties of the trade row of the world's top two economies.
Bond prices, which move inversely to yields, rose. The yield on three-year debts fell 0.9 basis point to 1.708 percent, and the return on benchmark five-year government bonds shed 1.1 basis points to 1.744 percent.
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(News Focus) Korea won set to lose further ground amid trade tensions, Fed concerns
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