Seoul: Shares drop to lowest since mid-2020 as recession fears grow

SOUTH Korean shares dropped to the lowest in more than 2 years on Monday (Sep 26) while the won posted its sharpest daily loss since March 2020, as fears of a global recession grew after Britain announced new tax cuts and huge increase in borrowing. The Korean won weakened, while the benchmark bond yield rose.

The benchmark Kospi was down 69.06 points or 3.02 per cent at 2,220.94, as at 6.30 am GMT, the lowest close since Jul 27, 2020.

Among heavyweights, technology giant Samsung Electronics fell 1.1 per cent and peer SK Hynix dropped 1.2 per cent, while battery maker LG Energy Solution slipped 3.04 per cent.

Britain’s new measures to support the economy as well as Italy’s election results sparked worries about a further downturn in the global economy, said Park Gwang-nam, an analyst at Mirae Asset Securities. Britain’s new finance minister, Kwasi Kwarteng, unleashed historic tax cuts and huge increases in borrowing on Friday in an economic agenda that floored financial markets, sending the sterling and British government bonds into freefall.

Oil prices plunged about 5 per cent to an 8-month low on Friday as the US dollar hit its strongest level in more than 2 decades and on fears rising interest rates will tip major economies into recession, cutting demand for oil.

The trading volume during the session in the Kospi index was 611.4 million shares. Of the total traded issues of 931, the number of advancing shares was 34.

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Seoul: Won posts seventh weekly loss on slowdown concerns; stocks fall

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Foreigners were net sellers of shares worth 5.9 billion won (S$5.9 million) on the main board.

The won was quoted at 1,431.3 per dollar on the onshore settlement platform, 1.54 per cent lower than its previous close at 1,409.3.

The most liquid 3-year Korean treasury bond yield rose by 31 basis points to 4.44 per cent, while the benchmark 10-year yield rose by 18.6 basis points to 4.293 per cent. REUTERS