Kospi plunges Friday as foreign investors go on selling spree

Stocks took a plunge on Friday after a three-day rally as foreign investors went on a selling spree amid higher-than-expected inflation in the United States. The local currency fell sharply against the dollar.

Screens in Hana Bank's trading room in central Seoul show the Kospi closing at 2,666.84 points on Friday, down 1.91 percent, or 51.92 points, from the previous trading session. [NEWS1]

Stocks took a plunge on Friday after a three-day rally as foreign investors went on a selling spree amid higher-than-expected inflation in the United States. The local currency fell sharply against the dollar.

The Kospi dropped 51.92 points, or 1.91 percent, to close at 2,666,84. It took a steep turn downward from the recent bullish rally, as the index once again fell below the 2,700 threshold after reaching a two-year high of 2,718.76 on the previous trading day.

Trade volume was heavy at 575 million shares worth 12.9 trillion won ($9.7 billion), with losers beating winners 557 to 224.

Institutional and foreign selling weighed down the benchmark Kospi, which recorded a net 1.06 trillion won selloff, while retail investors purchased local stocks.

Wall Street also lost ground after the February producer price index showed U.S. inflation was hotter than expected.

The Dow Jones Industrial Average fell 0.4 percent, and the S&P 500 dropped 0.3 percent. The Nasdaq Composite also shed 0.3 percent.

"The Kospi retreated amid overnight Wall Street losses over the U.S. producer price index for February recording a six-month record high," said Kim Seok-hwan, an analyst at Mirae Asset Securities.

In Seoul, blue chips retreated across the board, with Samsung Electronics dropping 2.69 percent to 72,300 won and chipmaker SK hynix sliding 0.43 percent to 161,200 won.

Financial shares also faced corrections following strong gains in the past few sessions. KB Financial fell 3.05 percent to 76,200 won, and Shinhan Financial slipped 3.69 percent to 49,600 won.

Battery-related shares also declined amid a lingering worrisome U.S. electric vehicle market outlook. LG Energy Solution slumped 4.21 percent to 398,500 won and Samsung SDI dropped 4.71 percent to 425,000 won.

The local currency ended at 1,330.50 won against the greenback, up 12.90 won from the previous session's close.

The Kosdaq lost 7.06 points, or 0.80 percent, to close at 880.46.

BY SHIN HA-NEE, YONHAP [shin.hanee@joongang.co.kr]