Samsung Electronics scrapped production of its doomed Note 7 smartphone on Tuesday, sparking a fresh collapse in its share price, as global markets struggled to maintain an oil-fueled rally.
Stock in the world’s biggest smartphone maker tumbled eight percent, sending Seoul stocks sliding 1.2 percent after it told customers to stop using their Galaxy Note 7 devices and called a halt to worldwide sales, as US officials warned the handsets could blow up.
The group halted production on Tuesday and then announced it was scrapping the model, once markets had shut in Asia. Consumers with Note 7s were advised by Samsung to power down and stop using them.
The announcement came a little over a month after Samsung announced a recall of 2.5 million Note 7s in 10 markets following complaints that its lithium-ion battery exploded while charging.
“The group’s flagship handset has turned out to be worse than a dud — it is a dangerous fire risk,” City Index analyst Ken Odeluga told AFP.

“This incendiary effect has spread to Samsung’s shares.
“After last week clawing back September’s double-digit losses, the stock wiped out three weeks of progress with today’s eight-percent fall.”
Odeluga added that Samsung had a big impact on sentiment because of its huge market capitalization of more than $200 billion (179 billion euros).
“It is a key weight of many Asia-Pacific equity market indices. If Samsung catches a cold, so do the region’s equities.”
The crisis has turned into a PR disaster for the company and the situation only worsened when reports emerged a week ago of replacement phones also catching fire.
Samsung shares had already fallen 1.5 percent Monday on reports it was suspending production of the device.
Analysts noted fierce rivals like US giant Apple — the second biggest smartphone maker — and challengers such as China’s Huawei would benefit in the short term.
“Samsung shares have fallen sharply today, but the company is still trading not too far off a record high, which shows that despite problems with its smartphone design, this is only one line in its gigantic electronics empire,” said Laith Khalaf at stockbroker Hargreaves Lansdown.
“This is undoubtedly a blow for Samsung, but the reputational damage to the company is not of the same scale of the emissions rigging scandal for Volkswagen or the Gulf of Mexico disaster for BP, thankfully because no-one has been hurt.
“Competitors might now enjoy a short term boost to sales.”

Source: Arab News