SKorean shares fall more than 2 percent on oil worry

South Korean shares tumbled more than 2 percent on Friday as investors dumped stocks on fears

oil prices would rise further after topping $140 overnight and following steep losses on Wall Street.

The Dow Jones industrials dropped more than 3 percent to its lowest finish since Sept. 11, 2006

as oil futures shot past $140, after the head of OPEC said crude could rise well over $150 a barrel this year and Libya said it may cut oil production.
‘Rising oil prices and inflation fears are beating up stock markets around the world,’ said Hong In-young, an analyst at Hyundai Motor IB Securities Co. Ltd.

Hong said that investors have lost most of their appetite for stocks amid growing worries that the domestic economy, along with other major economies, are at risk of suffering stagflation – the condition of slowing growth and rising prices.

‘The external conditions are so dire and out of control, making the latest rescue efforts ineffective.

‘The market may fall further to test 1,600 points if the global financial markets fail to get out of the turbulence soon,’ he said.

Forbes