Asian stock markets took a beating Monday as the impact of disappointing U.S. jobs data, deepening debt woes for the eurozone and slowing Chinese growth sapped investor sentiment. The Korea Composite Stock Price Index slid 2.8 percent to close at 1,783.1, continuing four sessions of declines.
The KOSPI's nosedive was the third-largest so far this year after May 18 (3.4 percent) and May 16 (3.1 percent). The junior Kosdaq plummeted 4.5 percent. Japan's Nikkei Index slid 1.7 percent, Taiwan 2.9 percent and China 2.5 percent.
Demand for the U.S. dollar surged as foreign investors dumped Korean shares and pulled their money out of the market. The won closed at W1,182, down W4.3 from the previous session and the second weakest this year after the trough of W1,185.5 on May 25.
Financial Services Commission Chairman Kim Seok-dong told officials at the agency that the crisis in the eurozone would have a "similar impact as the Great Depression of 1929" and added it was time to prepare for the "actual battle." He also gave a pessimistic outlook for the global economy. "European governments have different interests, while a lack of leadership has led to a failure to come up with accurate diagnoses of the causes of the crisis," Kim said.
The impact of the eurozone crisis is now being felt in the real economy as well. According to the Ministry of Knowledge Economy, outbound shipments of 7 out of Korea's top 13 export products fell during January to May compared to the same period last year, with exports to the EU, U.S. and China plunging more than 10 percent.