By Cho Jin-seo
Staff reporter
The won-dollar exchange rate rose to a nine-month high Tuesday and the stock markets also suffered mass selling by foreigners, as escalating military tension between the two Koreas rattled the already sluggish financial markets in Asia.
The won closed at 1,250 won per dollar, a move of 35.5 won from the previous day. Dealers said that government intervention managed to pull down the exchange rate from over 1,270 during the day.
The KOSPI was down 2.75 percent at 1,560.83. The index once fell more than 4 percent but recovered some of the losses in late trading thanks to massive buying from pension and institutional funds. The tech-heavy Kosdaq fell 5.54 percent to end the day at 449.96, its lowest since April 2009
The drop in the Seoul stock market was no worse than other major stock indices in Japan (Nikkei, -3.06 percent), Hong Kong (Hang Seng, -3.5 percent) and Taiwan (-3.2 percent). However, it was the military tension between South and North Korea that was instrumental in Tuesday's global market chaos, market watchers said.
"I thought I was back in September 2008," said SC First Bank economist Oh Suk-tae, describing the uproar in the foreign exchange dealing room of his firm. "Korea is now in the eye of the storm. Now people say that it is a 'Europe plus Korea' crisis". Link
