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Kospi surges 1.23% on news about new virus

Jan 23,2020
Stocks surged by more than 1 percent on Wednesday, rebounding from the previous session’s heavy selling triggered by rising concerns over the spreading China coronavirus, although market sentiment remains fragile over the virus. The won rose against the dollar.

The Kospi rose 27.56 points, or 1.23 percent, to close at 2,267.25, the highest level since Oct. 5, 2018.

Institutional investors purchased a net 287.5 billion won ($246.9 million) worth of stocks, giving a boost to the main index.

Han Ji-young, an analyst at Cape Investment & Securities, said institutional investors scooped up large-cap stocks as they believe initial market reactions to the spread of a new coronavirus, currently circulating in China and other Asian countries, were excessive.

China announced earlier in the day that it would take strong measures to curb the spread of the virus, easing fears somewhat.

Fears of the Wuhan coronavirus affected the shares of local vaccine manufacturers, as prices spiked.

The local economy reported a stronger-than-expected economic expansion for the fourth quarter of the year, helped by increased fiscal spending and firm domestic demand, fanning hopes that Asia’s fourth-largest economy is poised to rebound this year.

The economy grew at the slowest pace of 2 percent in a decade, weighed down by an extended slump in exports and a sharp decline in prices of semiconductors, a key export item.

For the year, the economy is projected to grow 2.3 percent.

In Seoul, large-cap stocks were mixed.

Samsung Electronics rose 1.47 percent to 62,300 won, and SK Hynix was up 1.71 percent to 101,000 won.

Among winners, local portal site provider Naver rose by 2.2 percent closing at 186,000 won, and Hyundai Motor surged by 8.55 percent closing at 127,000 won.

Steelmaker Posco fell 1.02 percent to 241,500 won, and Hyundai Engineering & Construction, a construction unit of the Hyundai group, was down 0.72 percent to 41,450 won.

The local currency closed at 1,164.60 won against the dollar, down 2.40 won from the previous session’s close.

The Kosdaq was up 11.73 points, or 1.73 percent, to close at 688.25.

Bond prices, which move inversely to yields, closed mixed.

The yield on three-year bonds added 4.8 basis points to stand at 1.44 percent, while the return on the benchmark 10-year government bond shed 5.2 basis points to reach 1.76 percent.

BY KANG JAE-EUN, YONHAP [kang.jaeeun@joongang.co.kr]