ID :
31406
Fri, 11/21/2008 - 11:05
Auther :
Shortlink :
https://www.oananews.org//node/31406
The shortlink copeid
Seoul`s financial markets hit by recession woes
(ATTN: RECASTS headline, lead to highlight market jitters; UPDATES with more quotes and info throughout)
SEOUL, Nov. 20 (Yonhap) -- South Korea's financial market was severely rattled on Thursday as escalating concerns over a global recession sapped investors' appetite for risky assets, analysts said.
The local currency closed at 1,497 won to the dollar, down 50.5 won, or 3.4
percent, from Wednesday's close, after tumbling as low as 1,517 won at one point.
It was the lowest level since March 13, 1998 when the Korean currency ended at
1,521 won. The won has lost more than 37 percent versus the greenback so far this
year, putting upward pressure on inflation.
Analysts said the won's weakness came as investors shunned away from risky assets
due to growing concerns over a global recession, sparking strong demand for the
dollar.
"The won tumbled to the psychologically important 1,500-won level during the
session. Concerns over economic deflation and strong dollar demand from importers
and investment trust firms brought down the won's value against the dollar," said
Jeon Seung-ji, a currency analyst at Samsung Futures Inc.
U.S. stock markets nosedived Wednesday as growing concerns over economic
deflation unnerved investors. The Dow Jones industrial average tumbled 5.07
percent and the tech-dominated Nasdaq composite index plunged 6.53 percent. It
was the first time that the Dow closed below the 8,000-point mark since March
2003.
Mirroring overnight plunges on Wall Street, South Korea's benchmark Korea
Composite Stock Price Index (KOSPI) nosedived 6.7 percent to 948.69 due to a
selling spree by foreign stock investors. Foreign investors dumped a net 89.3
billion won (US$60.2 million) worth of local stocks on the Seoul bourse.
Despite a massive liquidity injection by the government and the central bank, the
won's value spiraled to levels seen prior to South Korea's currency swap
agreement with the U.S. Federal Reserve, which helped stabilize the won.
"The government will not neglect excessive market jitters," said Choi Jong-ku,
head of the Finance Ministry's international financial bureau.
But analysts said the won is expected to lose ground to the greenback as economic
fundamentals point to the won's downward trend, adding that it is almost
meaningless to predict what level the won will fall to.
"Foreign investors are selling local stocks and bonds. Lagging export growth may
reduce the size of an expected current account surplus in the fourth quarter,
putting downward pressure on the won," said Lee Sung-kwon, an economist at
Goodmorning Shinhan Securities Co.
Jeon at Samsung Futures also said it may be hard for the local currency to gain
ground for the time being as the impact of a global credit crisis has begun to
spill over into the real economy.
sooyeon@yna.co.kr
(END)
SEOUL, Nov. 20 (Yonhap) -- South Korea's financial market was severely rattled on Thursday as escalating concerns over a global recession sapped investors' appetite for risky assets, analysts said.
The local currency closed at 1,497 won to the dollar, down 50.5 won, or 3.4
percent, from Wednesday's close, after tumbling as low as 1,517 won at one point.
It was the lowest level since March 13, 1998 when the Korean currency ended at
1,521 won. The won has lost more than 37 percent versus the greenback so far this
year, putting upward pressure on inflation.
Analysts said the won's weakness came as investors shunned away from risky assets
due to growing concerns over a global recession, sparking strong demand for the
dollar.
"The won tumbled to the psychologically important 1,500-won level during the
session. Concerns over economic deflation and strong dollar demand from importers
and investment trust firms brought down the won's value against the dollar," said
Jeon Seung-ji, a currency analyst at Samsung Futures Inc.
U.S. stock markets nosedived Wednesday as growing concerns over economic
deflation unnerved investors. The Dow Jones industrial average tumbled 5.07
percent and the tech-dominated Nasdaq composite index plunged 6.53 percent. It
was the first time that the Dow closed below the 8,000-point mark since March
2003.
Mirroring overnight plunges on Wall Street, South Korea's benchmark Korea
Composite Stock Price Index (KOSPI) nosedived 6.7 percent to 948.69 due to a
selling spree by foreign stock investors. Foreign investors dumped a net 89.3
billion won (US$60.2 million) worth of local stocks on the Seoul bourse.
Despite a massive liquidity injection by the government and the central bank, the
won's value spiraled to levels seen prior to South Korea's currency swap
agreement with the U.S. Federal Reserve, which helped stabilize the won.
"The government will not neglect excessive market jitters," said Choi Jong-ku,
head of the Finance Ministry's international financial bureau.
But analysts said the won is expected to lose ground to the greenback as economic
fundamentals point to the won's downward trend, adding that it is almost
meaningless to predict what level the won will fall to.
"Foreign investors are selling local stocks and bonds. Lagging export growth may
reduce the size of an expected current account surplus in the fourth quarter,
putting downward pressure on the won," said Lee Sung-kwon, an economist at
Goodmorning Shinhan Securities Co.
Jeon at Samsung Futures also said it may be hard for the local currency to gain
ground for the time being as the impact of a global credit crisis has begun to
spill over into the real economy.
sooyeon@yna.co.kr
(END)
