Concerns are rising over Korea’s economy as last week’s dismal economic data from the U.S. and China heightened fears of a global slowdown.

Korean stocks plunged and the won weakened on Monday, while officials said the deepening European fiscal crisis is also adding woes to the worsening economic conditions.

The benchmark Korea Composite Stock Price Index opened low at 1,782.58 points on Monday, down 51.93 points from the previous close, tumbling below the 1,800 mark for the first time since May 23. 

The KOSPI closed at 1,783.13 points, down 2.8 percent from the previous trading day.

Shares fell across all sectors, especially in medical equipment, construction, machinery, brokerages, retail and chemicals.

The domestic currency weakened against the greenback, with the won-dollar exchange rate closing at 1,182 won per dollar on Monday, weakening from 1,177.7 won.

Market analysts project the KOSPI support level to fall short of the 1,800 mark for the time being due to greater fears of an economic contraction in the eurozone and the U.S.

“Based on the presumption that Greece negotiates with the troika of lenders (the European Commission, the European Central Bank and the International Monetary Fund) instead of announcing a withdrawal from the eurozone, we predict the KOSPI support level to be around 1,770 points,” said Ryu Yong-seok, chief market analyst at Hyundai Securities.

“Since the ECB’s long-term refinancing operation has provided enough liquidity to eurozone’s financial institutions and the size of Greek government bonds has been reduced compared to last August and September, the possibility of a credit crunch seen back then is low.”

Lee Jae-man, an analyst at Tongyang Securities, said the KOSPI is likely to edge along the 1,780 mark and the range of decline will narrow towards the end of the week.

Stocks fell in other Asian markets as well, after the U.S. stock market suffered its worst day of the year Friday. The Dow Jones industrial average plunged 275 points, the sharpest since May 2010, after a surprisingly weak jobs report cast a shadow over the U.S. economy.

American employers added only 69,000 jobs in May, the fewest in a year, and the unemployment rate increased to 8.2 percent from 8.1 percent. Economists had forecast a gain of 158,000 jobs.

Manufacturing in China grew last month at the slowest pace this year, according to an index published by the statistics bureau and logistics federation on Friday.

China’s non-manufacturing industries also expanded at the slowest pace in more than a year, the National Bureau of Statistics and China Federation of Logistics and Purchasing said Sunday.

The reports added to proof of slower growth in the world’s second-biggest economy as the European debt crisis trims overseas demand and government regulations on real estate takes a toll on other industries.

By Kim So-hyun (sophie@heraldcorp.com)