Anchor: South Korea's main bourse dipped below the psychologically important one-thousand-900 mark in intraday trading amid Washington's designation of China as a currency manipulator and Japanese trade woes. It gained some ground thanks to massive institutional buying after financial authorities in Seoul hinted at the possibility of state intervention in the foreign exchange market should volatility become excessive.
Choi You Sun reports.

Report: South Korean stocks, which opened sharply lower on Tuesday after Washington's designation of China as a currency manipulator, managed to trim its losses thanks to massive institutional buying that offset an investor selling spree.

The benchmark Korea Composite Stock Price Index(KOSPI) shed 29-point-48 points, or one-point-51 percent, falling to one-thousand-917-point-50 at close on Tuesday.

After opening at one-thousand-900-point-36, the index plunged below the one-thousand-900 mark in early trading for the first time in over three years.

The KOSPI already dropped three-point-five percent in the previous two sessions since Friday, following Japan's decision to remove South Korea from a shortlist of preferential trade partners over a colonial-era dispute.

The secondary KOSDAQ index ended the day down three-point-21 percent at 551-point-50 points, recovering slightly after tumbling to a four-and-a-half-year low earlier in the day. 

The Korean won also rebounded to close flat at one-thousand-215-point-three won after opening four-point-seven won lower against the dollar.

The sharp declines are in large part due to increasing market volatility prompted by newly-launched salvos in the trade war between the United States and China.

On Monday, the U.S. Department of the Treasury designated China a currency manipulator for the first time since 1994, which is also the last time the Fed applied the designation.

The move apparently came in response to Beijing's decision to let its currency slip to an eleven-year low on Monday after Washington decided to impose additional tariffs on Chinese goods.

South Korea's Deputy Finance Minister Bang Ki-sun said Tuesday that Seoul will take "swift and bold" steps to stabilize the market under a contingency plan in case of excessive market volatility.
Choi You Sun, KBS World Radio News.