By Seo Jee-yeon
Staff Reporter


Seoul share prices plunged again Friday, hit by sell-offs by institutional and retail investors, with investor sentiment weakened by concern about a further downward correction.
The stock market, which rose on the robust earnings report from eBay and chipmaker Advanced Micro Devices in the U.S. stock bourse in the morning session tumbled in line with generally weak Asian stock markets.

Renewed concern about rising international oil prices weighed down on Asian investor sentiment.

The benchmark Korea Composite Stock Price Index (KOSPI) closed down 35.86 points or 2.64 percent to finish at 1,324.78.

The tech-loaded Kosdaq market suffered steeper falls, with the Kosdaq index falling 40.26 points or 5.71 percent to end at 665.31.

The Kosdaq’s fall marks the biggest daily point fall in three years and six months. It was the steepest fall since June 26, 2002 when it fell 52.5 points. In terms of percentage fall, it was the biggest in 20 months.

The KOSPI’s fall was the biggest since Wednesday when it fell 36.67 points or 2.64 percent. Dealers said that investors are worried that the market may fall further on concerns that the steep falls on Tuesday and Wednesday heralded a further correction in coming sessions.

Foreigners became net buyers, but their buying was not strong enough to reverse the direction of the market.

``Despite foreign net buying, the massive selling spree of institutional and individual investors hit the stock market hard,’’ Lee Jong-woo of Hanhwa Securities said.

In particular, investment and trust firms led institutional selling amid worries that further falls in stock prices may weaken their investment returns.

``Investor sentiment became very fragile following steep falls. They are overreacting to negative rumors,’’ Lee said.

Rumors that the government will slap taxes on capital gains from stock transactions and increase tax burden for people to increase tax revenue were haunting the market, dealers said.

Analysts predicted the Seoul stock market will face additional corrections but they remained confident over the long-term outlook for the market based on the strong fundamentals of the economy and corporations.

jyseo@koreatimes.co.kr