South Korea is ready to spend 250bn won ($203m; �130m) in the stock market to support hard-pressed Korean companies' shares, the government has said.

Seoul's Kospi index, the main measure of equity performance in Korea, has fallen more than 40% from its peak this year to nine-month lows, with 14% sliced off the index's value in September alone.

Admittedly, the slide is moderate compared to the six-year troughs seen elsewhere.

But the government remains worried that the risk of a flagging recovery in the US, Korea's main export market, will keep forcing the market lower.

With many of Korea's biggest companies still feeling their way out of the doldrums which followed the 1997 currency crisis, more stability in the markets would help calm investors' nerves.

On Tuesday lunchtime, the Kospi was half a won up on the day at 646.92.

Desperate times?

The move - equivalent to one eighth of the average value traded each day and 0.1% of overall market capitalisation - echoes recent action elsewhere in the world to prop up markets battered by waves of bad news.

There is already a stock stabilisation fund in Korea containing 900bn won, built up through mandatory levies on investment trusts and other players in the markets.

Until recently, the government was thinking of giving the money back.

But circumstances are forcing a rethink, officials said.

"We may use the interest, with the consent of member institutions, as a short-term countermeasure against plunging share prices," said Byeon Yangho, director-general of financial policy at the Ministry of Finance.