U.S. economic woes jolt S. Korean financial markets

SEOUL, Aug. 3 (Yonhap) -- South Korean financial markets were rattled by growing jitters over the U.S. economy on Wednesday, with the key stock index taking a nosedive and the local currency tumbling against the greenback.
The benchmark Korea Composite Stock Price Index (KOSPI) plunged 55.01 points, or 2.59 percent, to 2,066.26, the lowest close since June 28. Trading volume stood at a three-month high of 423.5 million shares, worth 7.95 trillion won (US$7.5 billion) with losers trumping gainers 715 to 145.
"Investors are fretting about the withering U.S. economy," said Lim Dong-rak, an analyst at Hanyang Securities Co. "Although U.S. debt limit uncertainties eased, growth domestic product and manufacturing figures shocked the market."
Multiple economic data released this week pointed to a halt in U.S. economic growth, including a stumble in the second-quarter GDP in the world's largest economy and a steep fall in the U.S. manufacturing sector.
"There is a deep suspicion about economic fundamentals," said Lim.
Foreign investors unleased massive sell-offs, with their net selling reaching 782.9 billion won, the largest daily amount since May 12.
All sectors finished in negative territory but auto and electronics exporters as well as shipyards were the biggest losers.
Hyundai Heavy Industries, the world's largest shipyard, plummeted 6.39 percent to 381,000 won and its smaller rival Samsung Heavy Industries plunged 6.46 percent to 39,800 won.
Market bellwether Samsung Electronics fell 2.23 percent to 833,000 won and chipmaking giant Hynix Semiconductor dropped 4.52 percent to 24,300 won.
Leading carmaker Hyundai Motor slumped 4.46 percent to 214,000 won and its smaller affiliate Kia Motors lost 2.57 percent to 75,700 won.
Retailers and companies that rely on domestic demand were the rare bright spot in the bear market. CJ O Shopping jumped 4.6 percent to 300,200 won and retail giant Lotte Shopping rose 1.35 percent to 486,500 won.
The local currency closed at 1,060.4 won, down 9.6 won from Tuesday's close, as investors flocked to safer assets on a grim outlook of the U.S. economy, dealers said.