Won hits 2-year low, Kospi crashes past 2,500
An electronic signboard at Hana Bank's headquarters in central Seoul shows the benchmark Kospi closing at 2,482.57 on Tuesday, down 49.09 points or 1.94 percent from the previous day. The won-dollar currency weakened to 1,403.5 won as of daytime trading closing, losing value by 8.8 won on-day. (Yonhap)
The Korean won and the local bourse dipped to their weakest levels in months, as Donald Trump’s victory in the US presidential election fueled concerns on the outlook of the export-reliant South Korean economy.
The Korean won closed its daytime trading against the US dollar at 1,403.5 won, marking an 8.8 won depreciation from the previous trading day. It was the first time in two years for the won-dollar currency exchange rate to close at over 1,400 won.
After the daytime closing, the won further lost value against the dollar to 1,407 won in after-hours trading, as of 5 p.m.
Trump’s return to the White House has caused the greenback to gain value, backed by concerns of protectionism and inflation, which would lead to a potential hike in the US Federal Reserve’s base interest rates. In turn, the local currency lost strength.
Following Trump's win, the won weakened to 1,404.5 won during intraday trading on Nov. 7. It gained strength by over 10 won in the following days with the US Federal Reserve's small rate cut, but later lost value again.
The dollar index that gauges the greenback's value against major peers inched up by 0.16 percent to 105.67, the highest level in around four months.
Along with the weakened Korean won, the bourse struggled Tuesday, with dampened prospects for the local economy.
The main bourse Kospi closed at 2,482.57, down 49.09 points, or 1.94 percent, from the previous trading day. After opening at 2,527.94, the Kospi inched up to 2,532.44, but later stumbled to the 2,480 level.
It was the first time for the benchmark index to wrap up below 2,500 since Aug. 5, when the global stock market, including that of Korea, suffered a crash fueled by fears of a slowdown in the US economy.
Retail investors were the sole net buyers, purchasing a net 333.4 billion won ($236.8 million). Foreign investors and institutional investors sold off a net 230.4 billion won and 109.6 billion won, respectively.
With the plunge, the market bellwether Samsung Electronics fell to a 52-week low of 53,000 won, marking a 3.64 percent loss, along with chipmaker SK hynix's 3.53 percent dip to 185,800 won.
The secondary bourse Kosdaq closed at 710.52, down 18.32 points, or 2.51 percent. More than 600 shares listed on the Kospi and Kosdaq recorded a 52-week low on the day.
