Seoul shares fall on doubts over gov't plan

SEOUL, Oct. 20 (Yonhap) -- South Korean stocks fell late Monday morning as
investors remained doubtful of whether the government's financial stabilization
package could effectively defuse the current credit crunch, analysts said.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 17.88 points, or
1.51 percent, to 1,162.79 as of 11:20 a.m.
"The measures may provide a short-term breather for the volatile foreign exchange
market, but its effectiveness in clearing an upward path for stocks remained
unclear among market players," said Rhyu Yong-suk, an analyst at Hyundai
Securities.
South Korea announced Sunday that it will provide US$100 billion worth of state
guarantees on local banks' foreign debts as part of efforts to ease the dollar
shortage in the local financial sector and shore up market confidence.
The government and the central bank also said they will also supply $30 billion
to local banks and exporters by using foreign reserve holdings.
Speculative reports that North Korea may soon make an "important announcement"
also seem to be burdening North Korea-related stocks, such as Hyundai units, Rhyu
noted.
The local currency was trading at 1,309.7 won to the U.S. dollar as of 11:20
a.m., up 24.3 won from Friday's close.