Institutional selling sends Kospi diving
January 18, 2006 ? Heavy selling by institutional investors brought the primary market's three-day climb to an abrupt halt yesterday. The Kospi plunged 32.21 points, or 2.3 percent, to end at 1,389.58.
"The growing concern among investors that the stock markets have peaked seems to have led to the sudden drop," said Lee Young-won, head of the investment strategy team at Daewoo Securities. Other analysts cited rumors that the government will raise taxes on stock profits and the Japanese stock market's poor showing as reasons for the Kospi's dive.
Almost every blue chip fell, including Samsung Electronics, which lost 1.3 percent to close at 697,000 won ($704.60). Kookmin Bank shed 2.1 percent; Hyundai Motor fell 1.2 percent. Posco, Hynix and LG Philips slipped 0.3 percent, 4 percent and 0.5 percent, respectively. One of the few bright spots was INI Steel, which gained 2 percent after gaining approval from the South Chungcheong province government to build Korea's second integrated steel mill in the region on Monday.
Total traded volume was at 462.8 million shares with a turnover of 5.5 trillion won. Decliners hammered advancers, 597 to 170.
The Kosdaq also fell sharply yesterday on massive selling by institutional investors, losing 15.87 points, or 2.1 percent, to close at 739.1. Internet giant NHN, however, climbed 0.1 percent, its third consecutive rise. Traded volume was 748.1 million shares valued at 2.9 trillion won.
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