Investors Shake Off Impeachment Worries

By Cho Hyung-kwon
Staff Reporter

The domestic stock and currency markets stabilized on Monday on the second trading day after President Roh Moo-hyun’s impeachment as investors shook off the initial shocks felt last Friday.

Despite concerns of a possible large-scale selling by overseas investors on the stock market, foreigners only made a small net selling of equities while the Korean won strengthened against the U.S. dollar, as the markets overcame Friday’s large fluctuations.

The Korea Composite Stock Price Index (KOSPI) rose 3.46 points, or 0.4 percent, to close at 852.26 and ending a six-day losing streak. The technology-heavy Kosdaq also added 4.98 points, or 1.18 percent, to 425.26.

Both equity markets rebounded from heavy declines seen last week as retail and institutional investors made a net buying of stocks.

The won gained slightly against the greenback as the won-dollar exchange rate fell 4 won to 1,176.80 as of 3:50 p.m. on Monday. The won had weakened almost 1 percent Friday with the won-dollar rate jumping to its highest level in nearly two months.

The premium on 10-year foreign exchange stabilization bonds traded in Hong Kong also fell from 0.75 percentage point Friday to 0.71 percentage point in afternoon trade.

Meanwhile, the yield on the three-year Treasury bond rose 0.01 percentage point to 4.58 percent.

Foreign investors made a net selling of stocks worth 45 billion won, but analysts said it was only a minor amount in relation to the political uncertainties that hit the nation four days ago.

However, trading was lackluster as only 378 million shares changed hands with most investors staying on the sidelines.

SK Corp. put on 5.03 percent to 40,700 won after the incumbent management fended off Sovereign Asset Management’s challenge to control the company’s board.

Korea Exchange Bank, Shinhan Financial Group, KT and Samsung Electronics closed higher while Kia Motors, POSCO and Kookmin Bank finished weaker.

On the Kosdaq market, Asiana Airlines, Daum Communications, KTF and Hanaro Telecom ended in positive territory while CJ Home Shopping and LG Micron closed lower.

kevincho@koreatimes.co.kr