Seoul shares tumble 6 pct on economic, earnings woes

(ATTN: RECASTS para 7 with updated info; ADDS bond yields at bottom)
SEOUL, Jan. 15 (Yonhap) -- South Korean stocks plunged 6.03 percent Thursday as
concerns over the deepening global recession and dimmer corporate earnings
outlooks battered investor sentiment, analysts said. The local currency fell
against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) sank 71.34 points to
1,111.34. Volume was moderate at 359.2 million shares worth 4.49 trillion won
(US$3.23 billion), with losers outpacing gainers 780 to 67.
"Concerns over global banking sectors and worsening earnings outlooks sent the
local key stock index sharply lower," said Kwak Joong-bo, an analyst at Hana
Daetoo Securities Co. "A selling spree by foreign investors weighed on the
market."
But Kwak said that despite sharp losses, the KOSPI is not likely to see a
downward trend as bleak corporate earnings and weak economic fundamentals have
already been factored into the market to some degree.
Steep losses caused the Korea Exchange, the bourse operator, to suspend program
trading for five minutes after the main index futures prices fell more than 5
percent. It was the first such emergency break this year.
Foreign investors dumped a net 181 billion won worth of local stocks on the main
bourse.
South Korean companies' fourth-quarter earnings reports will be released starting
Thursday, led by steelmaker POSCO. After the market's close, the world's No. 4
steelmaker said its fourth-quarter net profit reached 72 billion won, up 1.1
percent from a year earlier. POSCO's earnings fell short of market expectations
due to a global economic slump.
Financial shares lost ground on worries that bleak corporate earnings would weigh
on banks' balance sheets. KB Financial Group, the holding company of Kookmin
Bank, tumbled 9.16 percent to 35,200 won and its rival Shinhan Financial Group
declined 6.25 percent to 30,000 won.
Daewoo Shipbuilding & Marine Engineering, the world's third-largest shipbuilder,
nosedived 12.65 percent to 17,950 won after state-run Korea Development Bank
rejected a call by Hanwha Group, the preferred bidder on the shipyard, to
partially sell its stake in the shipbuilder.
Market bellwether Samsung Electronics fell 6.13 percent to 459,500 won and top
carmaker Hyundai Motor shed 10.42 percent to 43,000 won.
U.S. stocks closed lower Wednesday, hit by worries over the banking sector and
weaker U.S. retail sales figures. The Dow Jones industrial average fell 2.94
percent and the tech-dominated Nasdaq composite index declined 3.67 percent.
U.S. retail sales fell 2.7 percent in December, marking the larger-than-expected
drop and pointing to the worsening economic recession.
The local currency ended at 1,392 won to the dollar, down 44.5 won from
Wednesday's close, as offshore investors unloaded local stocks, dealers said.
Bond prices, which move inversely to yields, closed lower. The return on
three-year Treasuries gained 0.2 percentage point to 3.56 percent and the
benchmark yield on five-year government bonds rose 0.21 percentage point to 4.15
percent.
sooyeon@yna.co.kr
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