The unemployment rate climbed to 3.2 percent last month, the National Statistical Office said. The central bank, which predicts that economic growth will slow to an annual rate of 4.1 percent from 6.3 percent in 2002, this week cut interest rates for the first time in 20 months to encourage spending.
Rising joblessness may make consumers less inclined to spend, damping South Korea's economic growth.
"We cannot have confidence in Korean markets," said Cha Jong Do, who helps manage the equivalent of US$835 million at KB Investment Trust Management Co in Seoul. Cha declined to comment on which stocks he is buying or selling.
The Hang Seng dropped 32.89 to 9093.18. The futures contract for May delivery fell 0.6 percent to 9100.
Bank of East Asia Ltd, Hong Kong's fourth-biggest commercial lender, fell HK$0.15, or 1 percent, to HK$14.65.
HSBC Holdings Plc, the city's biggest bank, fell HK$0.50, or 0.6 percent, to HK$89.25. The city reported personal bankruptcy orders rose more than half last month from a year earlier as a sluggish economy prompted companies to fire staff and cut salaries, making it harder for people to repay debt.
The government said a total of 2,710 bankruptcy orders were issued last month compared with 1,769 bankruptcy orders a year earlier.
"We don't expect things to turn around going forward," said Sam Ho, who manages US$140 million in the Baring International Greater China fund. ``You won't see much growth and the valuation is not really that cheap.''
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