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S Korean shares tumble on concerns over Japan quake

03-15-2011 17:46 BJT Special Report:9.0 Magnitude Earthquake Rocks Japan |

SEOUL, March 15 (Xinhua) -- South Korean shares tumbled 2.4 percent on Tuesday as concerns over the scale of damage from Japan 's deadly quake and tsunami pummeled market sentiment, analysts said.

The benchmark Korea Composite Stock Price Index (KOSPI) plunged 47.31 points, or 2.4 percent, to 1,923.92, the lowest since Nov. 30 last year. Trading volume stood at 400.7 million shares, worth 9.8 trillion won (8.6 billion U.S. dollars).

The KOSPI traded at positive territory in the early morning session, but nose-dived below 1,900 at one point on news reports that two further explosions occurred at the Tokyo Electric Power's already-crippled nuclear power plant.

The No. 2 and No. 4 reactors at the Fukushima Dai-Ichi power plant exploded today after blasts at the No.3 reactor yesterday and at the No.1 reactor on March 12. Evacuation orders were issued to residents within a 30 km radius of the Fukushima power station.

Fears spread that damages from the Japan quake could be larger than initially expected. Further aftershocks could reportedly happen following Friday's 9.0 magnitude earthquake and the danger of further radiation leaks are rising.

"There is a 40 to 70 percent chance that a 7.0 magnitude earthquake will occur within a short time frame. Harmful levels of radioactivity are expected to be released from the No. 1 and No. 4 reactors," Shim Jae-youb, an equity strategist at Shinhan Investment Corp., said in a report. Shim advised investors to stay on the sidelines, given the amount of uncertainty remains unresolved.

"It is hard to predict the direction of the KOSPI as the index will move totally depending on what happen in Japan ," Kim Hyung- ryul, a Seoul-based analyst at NH Investment & Securities, said by phone.

Foreign investors dumped a net 230 billion won worth of local stocks, while building 5,223 short contracts in the KOSPI 200 index futures market.

After plunging below 1,900, the KOSPI trimmed its earlier losses in the late afternoon trading, helped by the presumed buying of the national pension fund and the Korea Post.

Shares in steelmakers, chemical and tech firms fell after gaining the previous session on anticipation that they could benefit from suspension of factory operations in Japan.

Market bellwether Samsung Electronics sank 4.44 percent to 860, 000 won, with POSCO and Hyundai Motor falling 3.48 percent and 2. 16 percent respectively.

The local currency finished at 1,134.80 won against the U.S. dollar, down 5.10 won from Monday's close.

Bond prices finished higher. The yield on the liquid three-year treasury notes lost 0.07 percentage point to 3.57 percent, and the return on the benchmark five-year government bonds dropped 0.07 percentage point to 3.89 percent.

Editor:Xiong Qu |Source: Xinhua

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