South Korea held an emergency meeting Friday to monitor financial market fluctuations sparked by an overnight plunge on Wall Street, in a bid to minimize its ripple effect here, the finance ministry official said.

   The meeting was convened as the South Korean stock market took a nosedive following overnight U.S. tumbles sparked by fears over another global recession and the European debt crisis.

   In early trade, the benchmark Korea Composite Stock Price Index (KOSPI) plunged more than 4 percent, with the local currency diving against the greenback. The turmoil came after the Dow Jones industrial average sank 4.31 percent, its worst drop since October 2008, and the tech-focused Nasdaq composite tumbled 5.08 percent.

   "The meeting was attended by finance ministry officials in charge of economic policy and international finance affairs," a ministry official said on condition of anonymity.

   "They are expected to discuss the overall situations in the financial and foreign currency markets, with their main focus to be placed on U.S. market jitters."

   The official noted that the finance ministry could open additional consultation channels with the central Bank of Korea and the Financial Services Commission in a bid to beef up market monitoring.

   Global financial markets have been going through turbulences recently, especially due to growing concerns over the debt crisis unfolding both in Europe and the U.S.

   Even after the recent last-minute deal in Washington to avert a much-feared debt default, financial markets still remain on edge over a possible double-dip recession in the world's largest economy as many latest economic indicators are showing worse-than-expected readings.

   South Korea's government said that there is a "low possibility" that the U.S. economy will slip into a double-dip recession, but the finance ministry noted that it will "closely" monitor economic situations there.

Source: Yonhap News (Aug.5, 2011)