Seoul shares to slip further on financial woes

SEOUL, Feb. 28 (Yonhap) -- South Korean stocks are likely to fall further in the coming week on deepening financial jitters and the weakening local currency, analysts said Saturday.

"Local shares will face increased downside risks that stem from increased
financial woes and a series of bad news," said Kim Joong-hyun, an analyst at
Goodmorning Shinhan Securities.
Concerns over struggling U.S. banks and defaults by Eastern European countries
will continue to weigh heavily on the market, he said. "The weaker won is also
deterring foreign investors," Kim said.
The country's key stock index, KOSPI, closed Friday at 1,063.03 points, down 2.92
points from a week earlier when it finished at 1,065.95, as foreign and
institutional investors dumped financial and tech shares to lock in part of gains
built up over the past few weeks.
The Korean won also fell to an 11-year low against the U.S. dollar on Friday on
investor concern about a shortage of U.S. dollars in South Korea. The local
currency fell to as low as 1,542.9 per dollar, its weakest since March 1998.
"Without the removal of risk stemming from the global financial sector, it will
be hard to expect any meaningful rebound," Kang Hyun-chul, an analyst at Woori
Investment & Securities. "There is not any meaningful upside momentum at this
point."
Meanwhile, the U.S. stock market dropped on Friday on a deepening contraction of
the U.S. economy and U.S. government move to save ailing Citigroup.
The Dow Jones industrial average fell 1.66 percent, at 7,062.93, the lowest close
since May 1997. The U.S. government said it could take as much as a 36 percent
state in Citigroup's common stock, fanning speculation that other American banks
might also need a similar show of support.
sam@yna.co.kr
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