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Stocks fall to a 4-year low on U.S. stimulus skepticism

Mar 12,2020
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Stocks dropped by almost 3 percent on Wednesday to a four-year low on growing skepticism about stimulus plans by the United States to counter the coronavirus outbreak. The won rose slightly against the dollar.

The Kospi fell 54.66 points, or 2.78 percent, to 1,908.27, the lowest level since Feb. 17, 2016, when the index closed at 1,883.94 points. The index dipped to as low as 1,898.27 points at one point.

Trading volume was moderate at 662.82 million shares worth 8.07 trillion won ($7.5 billion), with losers far outnumbering gainers 800 to 81.

Investors dumped local stocks amid risk-off sentiment amid concern about a possible recession caused by a prolonged Covid-19 outbreak.

Foreigners and institutions sold a combined 1.16 trillion won worth of stocks. Individuals purchased 1.08 trillion won.

On Tuesday, the Kospi ended 0.4 percent higher at 1,962.93, rebounding from a six-week low sparked by growing coronavirus concerns and a crash in oil prices.

Monday’s stock sell-off was fueled by the virus’s continued global spread and by Saudi Arabia starting an oil price war with Russia, slashing its selling prices and pledging to unleash pent-up supply to markets already suffering lower demand.

Large-cap stocks declined across the board.

Samsung Electronics fell 4.6 percent to 52,100 won, chipmaker SK hynix declined 4.0 percent to 85,500 won, Korean Air Lines shed 3.4 percent to close at 22,750 won, and refiner SK Innovation was down 2.5 percent at 98,000 won.

Among gainers, refiner S-Oil rose 2 percent to 62,500 won, and Lotte Chemical climbed 1.1 percent to 185,000 won.

The won closed at 1,193.00 won against the dollar, down 0.20 won from the previous session’s close.

The secondary Kosdaq was down 3.93 points, or 3.93 percent, to close at 595.61.

Bond prices, which move inversely to yields, closed lower. The yield on three-year bonds added 1.5 basis points to 1.093 percent, and the return on the benchmark 10-year government bond added 24.0 basis points to reach 0.80 percent.

BY KIM YEON-AH, YONHAP [kim.yeonah@joongang.co.kr]