Shares plunge to yearly low as foreign investors flee the market

Korean shares hit a year-low, with the benchmark Kospi falling 2.64 percent, to close at 2,417.08, marking its lowest since Nov. 13, 2023.

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,417.08 points on Wednesday, down 2.64 percent, or 65.49 points, from the previous trading session. [YONHAP]

Shares fell to their lowest level in a year Wednesday, extending their losing streak to a fourth day, as investors' concern grew over policy uncertainties under the incoming Trump administration.

The local currency also dropped against the dollar to a two-year low, breaching 1,400 won (99 cents) for the second straight session as of 3:30 p.m.

The benchmark Kospi sank 65.49 points, or 2.64 percent, to close at 2,417.08, marking its lowest since Nov. 13, 2023, when the index closed at 2,403.76. The Kosdaq lost 20.87 points, or 2.94 percent, to close at 689.65.

Trade volume was moderate at 605 million shares worth 10.8 trillion won ($7.6 billion), with losers far outpacing winners 801 to 104.

Foreigners sold a net 711 billion won worth of local stocks, and individuals bought a net 650 billion won. Institutions bought a net 18.7 billion won.

Investors' sentiment was dampened, with exporters, such as Samsung Electronics and Posco Holdings, coming under heavy sell-offs.

The weak won also added downward pressure to the market, which investors fear would accelerate foreign capital flight.

“The domestic market is in a slump due to the strong U.S. dollar and a rise in government bond yields,” said Kim Ji-won, a researcher at KB Securities.

Samsung Electronics plunged 4.53 percent to 50,600 won, the lowest closing in more than four years amid lingering concerns over its business competitiveness in the chip market.

Carmakers also finished bearish, with Hyundai Motor falling 3.43 percent and Kia losing 1.2 percent, to close at 199,900 won and 90,800 won, respectively.

Steelmakers closed lower as well, with Posco Holdings sinking 5.25 percent and Korea Zinc sliding 14.1 percent.

The local currency was trading at 1,406.6 won against the greenback at 3:30 p.m., up 3.1 won from the previous session's close.

The Korean financial market, meanwhile, will open at 10 a.m., one hour later than usual, on Thursday due to the College Scholastic Ability Test.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds rose 4.2 basis points to 2.943 percent, and the return on the benchmark 10-year U.S. government bonds climbed 12.3 basis point to 4.429 percent.

BY CHO YONG-JUN, YONHAP [cho.yongjun1@joongang.co.kr]