(RTTNews) - The South Korean market closed slightly lower on Tuesday, recovering sharply from the 5.5% slump in early trade after U.S. Congress rejected a financial bailout plan. The market finished lower for the third straight trading session. The benchmark Korea Composite Stock Price Index or KOSPI closed down 8.30 points or 0.57% at 1,448.06 points, after hitting a session low of 1,376.72. Over the month, the key index has lost 17.8%.

The recovery in the local stock matrket is partly attributable to market measures introduced by the government earlier in the day. The Financial Services Commission said that it would ban short-selling of stocks for the time being and allowed listed firms to buy back more of their own shares.

Meanwhile, domestic economic data released today pointed to a slump in the real economy and worsening export market conditions. South Korea’s industrial output fell a seasonally adjusted 2.2% in August from July, a deeper decline than expected. The current account balance hit its biggest deficit on record in August. The current account deficit reached a 12-year high of US$4.71 billion in August compared to a revised $2.53 billion deficit in the previous month.

Additionally, the business survey index for manufacturers’ expectations declined to 78 for October compared to 79 in the previous month, according to the Bank of Korea.

In the currency market, the weak current account data added to pressure on the South Korean won. The won finished the local session down 1.5%, its lowest level since early 2003. The local currency closed at 1,207.0 won to a dollar, down 18.2 from Monday’s close of 1,188.8 to a dollar.

Banking stocks fell across the board. Shinhan Financial Group lost 2.0% and Hana Financial Group slipped 0.2%. Among brokerages, Woori Investment & Securities plunged 2.7% and Hyundai Securities dropped 1.3%.

In the tech sector, market heavyweight Samsung Electronics declined 0.9% and LG Display shed 0.5%. Top steelmaker POSCO declined 2.6%.

Bucking the trend top carmaker Hyundai Motor gained 1.2% and Kia Motors jumped 2.8% to a 52-week high on the back of a weaker South Korean won and better sales outlook.

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Posted in Categories: Economy, Releases.

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