Seoul shares fall on economic recession fears

SEOUL, Oct. 17 (Yonhap) -- South Korean stocks opened higher but took a downward
turn late Friday morning as investors dumped shares on concerns that the recent
financial meltdown could lead to a worldwide economic recession, analysts said.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 23.24 points, or
1.91 percent, to 1,190.54 as of 11:20 a.m. following a 9.44 setback a day
earlier.
"The global financial crisis and a possible worldwide economic recession dented
already-fragile investor sentiment," said Kim Jung-hyun, an analyst at
Goodmorning Shinhan Securities. "Panic is spreading that South Korea might fall
victim to the ongoing financial fiasco."
Financial shares drove the market downswings. Second-ranked financial service
provider Shinhan Financial Group plunged 9.74 percent and smaller Woori Finance
Holdings shed 7.24 percent.
Shipyard and shipping shares were also severely dented. Leading shipbuilder
Hyundai Heavy Industries dived 7.8 percent following its daily limit plunge of
14.87 percent a day earlier. Shipping giant Hanjin Shipping also fell 3.37
percent.
Tech exporters were mixed. Samsung Electronics lost 1.09 percent, while
chipmaking giant Hynix Semiconductor managed to gain ground after its previous
day's plunge. Steelmaker POSCO was also among the few advancing stocks, rising
3.15 percent.
The downswings came despite overnight Wall Street surges. The Dow Jones
industrial average closed up 4.68 percent and the tech-dominated Nasdaq composite
index also advanced 5.49 percent.
The local currency market continued to undergo a highly volatile session. The won
was trading up 10.9 won at 1,362.1 won to the U.S. dollar as of 11:20 a.m.,
paring much of its early gains amid growing liquidity shortage woes.