Seoul shares see continued sell-off on US ratings cut

SEOUL: Seoul shares tumbled further on Monday as foreign investors became more cautious after a downgrade of the US credit rating.

The Korea Composite Stock Price Index (KOSPI) fell as much as 3.1 percent to its lowest since mid-March, before trading 2.51 percent lower at 1,874.97 points as of 0229 GMT.

"The market is rattled by uncertainty after the US ratings downgrade. It has never experienced this before," Kim Young-june, an analyst at SK Securities, said.

"It could take time to soothe the jitters."

Finance chiefs from the world's industrial powers on Monday pledged to take whatever actions were needed to steady financial markets, spooked by the political wrangling in Europe and the United States over slashing their huge budget deficits.

The move came after Standard & Poor's cut the US credit rating by one notch to AA-plus from AAA.

"The US rating change, together with the weakening sovereign creditworthiness in Europe, does point to an increasingly uncertain and challenging environment ahead," S&P said in a statement on Monday.

Foreign investors were sellers of a net 177.6 billion won ($166.4 million) worth of stocks as of 0213 GMT, poised to mark their fifth consecutive session of selling.

Flat screen maker LG Display plunged 4.9 percent, leading the tech sector's losses.

South Korea's No.2 carmaker Kia Motors fell 3.3 percent, while first-ranked Hyundai Motor lost 2.2 percent.

Dongkuk Steel was the worst performer among steel shares, skidding 11.9 percent.

Refiners and chemicals firms were also down, with South Korea's top refiner SK Innovation dropping 3.2 percent and biggest chemicals firm LG Chem tumbling 5 percent.

Most builders and shipbuilders also lost ground, but Samsung Engineering was flat after rising more than 5 percent on news it signed a $355 million agreement with a unit of Exxon Mobil Corp to build a crude oil production plant in Indonesia.

Copyright Reuters, 2011