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Seoul stocks close lower on coronavirus cluster infections

(Yonhap)
(Yonhap)

South Korean shares closed lower Thursday, snapping a three-day winning streak, on the largest number of daily infections of the new coronavirus in nearly two months. The Korean won fell against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) lost 2.66 points, or 0.13 percent, to close at 2,028.54. Trading volume was high at about 1.15 billion shares worth some 14.2 trillion won ($11.5 billion), with losers outnumbering gainers 689 to 177.

Foreigners bought a net 42.8 billion won, while retail investors sold off a net 285.3 billion won. Institutions purchased a net 241.8 billion won.

The escalating COVID-19 woes erased much of the morning gains. The index hit a session-high in the morning, following the Bank of Korea's decision to cut its key interest rate by a quarter percentage point to a record low of 0.50 percent.

The stocks declined fast after South Korean quarantine officials reported 79 new cases of the new coronavirus, the biggest single-day spike in 53 days.

The increase is mostly blamed on mass infections at a distribution center in Bucheon, west of Seoul, which is operated by e-commerce giant Coupang, according to the Korea Centers for Disease Control and Prevention (KCDC).

Health authorities expressed concerns that this new cluster infection may lead to more cases.

The BOK's grim forecast about South Korea's growth this year accelerated the drop. Following the rate cut announcement, the BOK sharply slashed its growth outlook for this year to a 0.2 percent on-year contraction amid the coronavirus pandemic, the lowest point in over two decades.

"The local stock markets are shaken by rising uncertainties following the BOK's growth outlook," NH Investment & Securities analyst Noh Dong-kil said. "The (BOK's) downward economic forecast seems to have undermined the investors' appetite for risks," he added.

In Seoul, large caps closed mixed.

Market bellwether Samsung Electronics rose 1.0 percent to 50,400 won and No. 2 chipmaker SK hynix jumped 3.07 percent to 83,900 won.

Leading automaker Hyundai Motor slid 0.92 percent at 97,200 won, while its smaller affiliate Kia Motors climbed 0.47 percent to 32,100 won.

Internet portal giant Naver spiked 5.25 percent to 240,500 won, with its local rival Kakao up 2.59 percent to 267,000 won.

Top pharmaceutical firm Samsung BioLogics dropped 2.08 percent to 611,000 won, and leading chemical maker LG Chem fell 1.77 percent to 388,500 won.

The local currency closed at 1,239.60 won against the US dollar, down 5.20 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys lost 4.5 basis points to 0.818 percent, and the return on the benchmark five-year government bond shed 2.0 basis points to 1.076 percent. (Yonhap)
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