ID :
26324
Fri, 10/24/2008 - 16:17
Auther :
Shortlink :
https://www.oananews.org//node/26324
The shortlink copeid
S. Korean won tumbles on slumping shares
(ATTN: CHANGES closing FX rate in para 2)
SEOUL, Oct. 24 (Yonhap) -- South Korea's currency tumbled against the U.S. dollar on Friday as slumping stocks and continued sell-offs of local shares by foreigners worsened already-fragile investor sentiment, analysts said.
The local currency ended at 1,422 won to the greenback, down 13.2 won from
Thursday's close, reversing from an earlier strong start. This marked the fourth
day of declines with the currency losing 107 won during the period.
"With dollar demand remaining strong, the plunge in stock markets is sending
investors into panic mode," said Jeon Seung-ji, a currency analyst at Samsung
Futures. "The government's smooth operation seemed to help trim sharp losses in
later sessions, but market jitters are spreading fast across the financial
sector."
The won gained ground in early trading, rising as high as 1,390 won as overnight
rallies in U.S. stocks bolstered the overall market mood. But tumbling local
stock markets and gloomy economic outlooks for South Korea hit investor sentiment
hard. The benchmark KOSPI nosedived 10.57 percent to 938.75.
The local currency and stock markets have been taking a severe beating since the
global financial turmoil deepened following the collapse of major American
investment banks last month.
Foreign investors were a main contributor to the market setbacks. They have
dumped a net 40 trillion won (US$27.8 billion) since the start of this year to
move away from risky emerging markets. Their ownership ratio in local shares was
down to less than 30 percent after peaking at around 42 percent in 2004.
Heavy foreign sales result in more dollar demand as the proceeds need to be
converted to the greenback before being cashed out. The won has lost around 35
percent and the KOSPI has fallen 47 percent so far this year.
The market mood was also dented as fears grew that South Korea's economy might
slip into a recession. Earlier in the day, the Bank of Korea, the nation's
central bank, announced that its gross domestic product expanded 0.6 percent
on-quarter in the July-September period, the slowest pace in four years.
The financial market is showing few signs of stabilizing despite the government's
recent intensifying efforts to ease a dollar shortage in the banking sector and
shield the local economy from spreading global financial turbulence.
On Sunday, the Finance Ministry unveiled a $130 billion bailout package that
guarantees banks' foreign debts for three years and injects dollars into
cash-strapped financial institutions.
Two days later, the ministry announced sweeping measures to buy land and unsold
houses from struggling builders and to ease their liquidity crunch.
The move is intended to protect the flagging construction sector from the ongoing
financial turmoil, as it accounts for around 20 percent of the nation's gross
domestic product.
kokobj@yna.co.kr
(END)
SEOUL, Oct. 24 (Yonhap) -- South Korea's currency tumbled against the U.S. dollar on Friday as slumping stocks and continued sell-offs of local shares by foreigners worsened already-fragile investor sentiment, analysts said.
The local currency ended at 1,422 won to the greenback, down 13.2 won from
Thursday's close, reversing from an earlier strong start. This marked the fourth
day of declines with the currency losing 107 won during the period.
"With dollar demand remaining strong, the plunge in stock markets is sending
investors into panic mode," said Jeon Seung-ji, a currency analyst at Samsung
Futures. "The government's smooth operation seemed to help trim sharp losses in
later sessions, but market jitters are spreading fast across the financial
sector."
The won gained ground in early trading, rising as high as 1,390 won as overnight
rallies in U.S. stocks bolstered the overall market mood. But tumbling local
stock markets and gloomy economic outlooks for South Korea hit investor sentiment
hard. The benchmark KOSPI nosedived 10.57 percent to 938.75.
The local currency and stock markets have been taking a severe beating since the
global financial turmoil deepened following the collapse of major American
investment banks last month.
Foreign investors were a main contributor to the market setbacks. They have
dumped a net 40 trillion won (US$27.8 billion) since the start of this year to
move away from risky emerging markets. Their ownership ratio in local shares was
down to less than 30 percent after peaking at around 42 percent in 2004.
Heavy foreign sales result in more dollar demand as the proceeds need to be
converted to the greenback before being cashed out. The won has lost around 35
percent and the KOSPI has fallen 47 percent so far this year.
The market mood was also dented as fears grew that South Korea's economy might
slip into a recession. Earlier in the day, the Bank of Korea, the nation's
central bank, announced that its gross domestic product expanded 0.6 percent
on-quarter in the July-September period, the slowest pace in four years.
The financial market is showing few signs of stabilizing despite the government's
recent intensifying efforts to ease a dollar shortage in the banking sector and
shield the local economy from spreading global financial turbulence.
On Sunday, the Finance Ministry unveiled a $130 billion bailout package that
guarantees banks' foreign debts for three years and injects dollars into
cash-strapped financial institutions.
Two days later, the ministry announced sweeping measures to buy land and unsold
houses from struggling builders and to ease their liquidity crunch.
The move is intended to protect the flagging construction sector from the ongoing
financial turmoil, as it accounts for around 20 percent of the nation's gross
domestic product.
kokobj@yna.co.kr
(END)
