(Updates to mid-morning)
SEOUL, Nov 20 (Reuters) - South Korean stocks fell 3 percent
on Tuesday, hitting a 10-week low, as financials such as Kookmin
Bank <060000.KS> were battered after a downgrade of Citigroup Inc
boosted worries about subprime mortgage-related losses.
Technology shares including Samsung Electronics Co Ltd
<005930.KS> were hit by lingering concerns over the impact on the
U.S. economy from a subprime credit crisis, despite a
better-than-expected quarterly profit and outlook at
Hewlett-Packard CO <HPQ.N>.
Higher oil prices also dented Korean Air Co <003490.KS> and
other energy cost-sensitive stocks.
The Korea Composite Stock Price Index <.KS11> shed 3 percent
to 1,836.11 points as of 0116 GMT, the lowest since Sept. 13.
"Market sentiment is seriously damaged as the index broke
down support levels," said Kim Joon-kie, an analyst at SK
Securities.
"Further mortgage losses at U.S. financial companies are
unknown and investors speculate that the losses would be larger
than expected. That may hit the whole of the U.S. economy."
On Monday, Citigroup <C.N> shares suffered a fresh beating
after Goldman Sachs lowered the stock's rating to "sell" from
"neutral" and said the largest U.S. bank may have to write off
$15 billion over the next two quarters on mortgage losses.
That punched Seoul's lenders, with the banking subindex
<.KS51> down 2.94 percent.
Kookmin, South Korea's top bank, dropped 3.67 percent to
65,700 won, and Shinhan Financial Group <055550.KS> fell 3.1
percent to 50,000 won.
Brokerages and insurers also fell.
Samsung Securities Co <016360.KS>, South Korea's most
valuable brokerage, lost 1.31 percent to 98,200 won, and Samsung
Fire and Marine Insurance Co Ltd <000810.KS>, the country's top
non-life insurer, slid 2.82 percent to 224,000 won.
Fears about the U.S. subprime mortgage sector spilled over to
technology shares and exporters.
Samsung, the world's top memory chip maker, fell 2.59 percent
to 527,000 won, while rival Hynix Semiconductor Inc <000660.KS>
declined 2.83 percent to 22,350 won.
LG.Philips LCD Co Ltd <034220.KS>, the world's No.2 maker of
large flat screens, dropped 3.97 percent to 50,800 won, which
also dragged down its biggest shareholder, LG Electronics Inc
<066570.KS>, 4.17 percent to 89,600 won.
Hyundai Motor Co <005380.KS>, the world's sixth-largest
automaker, fell 2.32 percent to 67,300 won and affiliate Kia
Motors Corp <000270.KS> lost 0.71 percent to 9,840 won.
Higher oil prices caused the country's No.1 airline, Korean
Air, to drop 3.73 percent to 74,800 won, and state-run Korea
Electric Power Corp <015760.KS> fell 3.18 percent to 38,050 won.
(Reporting by Cheon Jong-woo; Editing by Sei Chong)
(([email protected]; +82-2-3704-5665; Reuters Messaging:
[email protected]))
Keywords: MARKETS KOREA STOCKS