South Korea’s Stock Market Hits Skids

South Korea’s stock market plunged Thursday in its biggest daily fall in history, sparking violent protests by investors against the government.

Trusts joined panicking individuals in selling across the board, sending the composite stock index dropping by 28.96 points to close at 726.11. The previous record decline in a day was 27.53 points on April 12 last year.

The market has now fallen about 22% this year on general pessimism over the country’s economic future.

Brokers said furious investors held demonstrations at securities offices in Seoul’s business district, Myongdong, and at the headquarters of securities companies in Yoido.

A broker said one distraught investor at a demonstration at a Daishin Securities branch blamed President Roh Tae Woo for encouraging people to buy stocks.

“She said now she has so many losses, it makes her sick to see Roh’s face on television,” the broker said.

Yonhap news agency reported demonstrations at branch offices in Taegu and other provincial cities.

“Roh regime, take responsibility for the stock market plunge and get out,” chanted 200 investors in Puchon, south of Seoul. In Taegu protesters yelled: “Spineless Roh Tae Woo, get out.”

Witnesses said more than 300 riot police surrounded the Korea Stock Exchange in Yoido to head off protests.

Analysts said investment trusts had to sell some of their holdings to raise cash to satisfy people who were asking for their money back.

“We have a double whammy here,” said Edward Kim at Daewoo Securities. “Investors are selling and trusts are selling.

“It’s overreaction, panic. You cannot logically explain the market’s movement. It’s illogical,” he said.

Brokers said the threat of police action to break up a strike at Hyundai Heavy Industries huge shipyard in southeastern Ulsan also depressed sentiment. The government declared the strike illegal after an emergency Cabinet meeting on Thursday.

The index started out 1990 on an upbeat note and marked a high on Jan. 4 at 928.82.