Seoul shares plummet 3.72 pct on currency woes

(ATTN: ADDS bond yields at bottom)
SEOUL, Feb. 20 (Yonhap) -- South Korean stocks plunged 3.72 percent Friday as
foreign investors dumped shares on jitters over the local currency, analysts
said. The won fell to a three-month low against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) sank 41.15 points to
1,065.95. Volume was heavy at 580.75 million shares worth 4.1 trillion won
(US$2.72 billion), with losers outpacing gainers 751 to 103.
"Foreign investors dumped shares on fears a weaker won may erode the value of
their share holdings," said Choi Jae-shik, an analyst at Daeshin Securities Co.
"If the won keeps falling against the dollar, more foreign investors are likely
to sell their stocks, unleashing a vicious cycle," he said.
Most blue chips lost ground, with market leader Samsung Electronics dropping 2.71
percent to 467,500 won and top shipbuilder Hyundai Heavy Industries declining
9.02 percent to 181,500 won.
Financial shares also lost ground on speculation that local lenders may not be
able to repay foreign debts due in March amid a dollar shortage.
KB Financial Group, which controls top lender Kookmin Bank, dropped 3.36 percent
to 27,350 won, while Shinhan Financial Group gained 5.18 percent to 22,900 won.
The local currency closed at 1,506 won to the dollar, down 25 won from Thursday's
close and the lowest level since Nov. 24, 2008, as foreign stock investors
snapped up the greenback, dealers said. The local currency fell against the
dollar for a ninth day.
Bond prices, which move inversely to yields, closed lower. The return on
three-year Treasuries rose 0.08 percentage point to 3.92 percent and the
benchmark yield on five-year government bonds gained 0.06 percentage point to
4.77 percent.
ygkim@yna.co.kr
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