KOSPI and Kosdaq Plunge to New Low

The Korean Composite Stock Price Index (KOSPI) fell to a 16-month low for the second straight day. The over-the-counter Kosdaq plunged as well to an all-time low for two straight days.

As a possible war in Iraq and nuclear threat by North Korea continue, the stock market is expected to remain sluggish for the time being with fears of shrinking growth and a lowered corporate earnings rate.

The Kospi closed at 560.26 Wednesday, down 16.32 points from the previous day. It was the lowest level seen since Nov. 2, 2001 in the aftermath of the Sept. 11 terrorist attacks on the U.S.

The Kosdaq lost 1.62 points or 3.95% to close at 39.36. It is the first time that the index plunged to the level of the 30s.

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Despite LG Card’s cross trade to foreigners, worth 77 billion won, foreign investors sold stocks worth 82.2 billion won, to pull the stock index down. In addition, they purchased 6,000 futures until 10 am and afterward sold 5,000 futures, dropping the price of the Kospi 200 futures index for March by 2.30 points or 3.16%.

In Asian countries, Japan`s Nikkei stock average finished 0.1 percent lower Tuesday, as well as Hong Kong and Taiwan’s markets, decreasing 1.81% and 0.53% respectively, as the U.S.’ Dow Jones average and Nasdaq fell by 1.70% and 0.95% respectively.

Chan-Sun Hong hcs@donga.com