Stocks drop as signs of a possible recession more evident

Stocks snapped their three-day winning streak Wednesday, as investors were spooked by overnight plunges on Wall Street caused by growing concerns about a recession. The won tumbled against the dollar.

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,377.99 points on Wednesday, down 44.10 points, or 1.82 percent, from the previous trading day. [YONHAP]

Stocks snapped their three-day winning streak Wednesday, as investors were spooked by overnight plunges on Wall Street caused by growing concerns about a recession. The won tumbled against the dollar.

The Kospi shed 44.1 points, or 1.82 percent, to close at 2,377.99 points.

Trading volume was moderate at about 411 million shares worth some 7.7 trillion won ($5.9 billion), with losers outnumbering gainers 511 to 336.

Institutions sold a net 504.4 billion won, and foreigners offloaded 232.7 billion won, while retail investors bought 693.9 billion won.

Overnight, Wall Street tumbled as bleaker-than-expected economic data intensified concerns about a U.S. recession. The Dow Jones Industrial Average dipped 1.56 percent, while the Nasdaq composite sank 2.98 percent.

Seoul stocks got off to a weak start and extended their earlier losses, following Bank of Korea data showing the country's inflation expectations in June hit the highest level in about a decade.

"The negative factors from the macroeconomic environment are still weighing, especially with the volatility in the foreign currency markets," said Mirae Asset Securities analyst Park Gwang-nam.

In Seoul, Samsung Electronics dropped 2.36 percent to 58,000 won, with SK hynix losing 1.36 percent to 94,000 won.

LG Energy Solution sank 4.63 percent to 391,500 won after a report that its massive investment plan in the U.S. will be delayed due to rising costs.

Hyundai Motor plummeted 5.65 percent to 175,500 won, with Kia dipping 6.11 percent to 76,900 won. Their stock prices tumbled following reports that German prosecutors raided Hyundai Motor's operations in Germany and Luxembourg for alleged use of devices in diesel vehicles to mask emissions.

The local currency closed at 1,299 won against the dollar, up 15.6 won from the previous session's close.

The Kosdaq lost 7.16 points, or 0.93 percent, to close at 762.35 points.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds gained 0.8 basis points to 3.547 percent, and the yield on the benchmark 10-year government bond lost 3.0 basis points to 3.17 percent.

BY CHO JUNG-WOO, YONHAP [cho.jungwoo1@joongang.co.kr]