Seoul shares plunge on rise of oil prices to record high

South Korean stocks ended sharply lower Friday as investors unloaded shares on concerns over record-high global oil prices, analysts said.

The benchmark Korea Composite Stock Price Index (KOSPI) plunged 29.89 points, or 2.32 percent, to 1,255.13. Trading volume came to 193 million shares valued at 2.7 trillion won (US$2.8 billion).

Losers outpaced gainers 608 to 155.

The blue-chip KRX 100 index closed down 59.95 points, or 2.24 percent, at 2,605.89, and the tech-laced KOSDAQ index lost 11.45 points, or 2 percent, to 559.66.

"South Korean stock markets fell sharply as record-high oil prices boosted investor concerns," said Kim Seong-ju, an analyst at Daewoo Securities. "The U.S. stock markets and other Asian markets plunged as well due to oil concerns."

On Thursday, U.S. stock markets tumbled for a second day as crude oil for August delivery rose to a new record of US$76.70 a barrel. The Dow Jones industrial average fell more than 1.5 percent, while the tech-heavy NASDAQ composite index lost 1.7 percent.

Institutional investors dumped shares across the board through futures-related program selling, while foreign investors mostly unloaded tech issues on concerns over their second-half performances. Concerns over oil prices also contributed to the tech issues' fall, Kim said.

Earlier in the day, South Korean tech giant Samsung Electronics said its second-quarter net profit fell 10.9 percent year-on-year to 1.51 trillion won (US$1.59 billion) as the company cut handset prices to cope with rising competition.

On Tuesday, LG.Philips LCD, the world's second-largest manufacturer of flat panels, reported a record loss in the second quarter of 322 billion won as a result of sharp price cuts. The result was much worse than the market consensus of a 184 billion won loss.

Many analysts were expecting their earnings to bottom out in the second quarter but improve in the second half based on higher seasonal demand for their products.

Samsung Electronics dropped 2.67 percent to 584,000 won, while LG.Philips LCD lost 1.75 percent to 233,000 won. Hynix Semiconductor fell 3.13 percent to 30,900 won.

SK Telecom, South Korea's top mobile phone operator, shed 1.54 percent to 191,500 won, and LG Telecom ended down 3.54 percent to 9,270 won.

POSCO, the nation's leading steelmaker, declined 2.71 percent to 233,000 won.

On the currency market, the South Korean won fell against the U.S. dollar for a fourth straight session as foreign investors sold shares in Seoul. The Bank of Japan's 0.25 percentage rate hike had little impact as the move was widely expected. The currency closed at 953.80 won to the greenback, down 4.60 won from the previous session's end.

Bond prices, which move inversely to yields, rose. The return on the benchmark three-year Treasuries fell 0.02 percentage point to 4.91 percent, while the yield on the five-year government bonds dropped 0.01 percentage point to 5.02 percent.

Seoul, July 14 (Yonhap News)