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Steep drop for Kospi erases last week’s rally, investors flee

Mar 10,2020
Stocks greatly extended their losses late Monday, as investors went on a selling spree following a plunge in oil prices and continuing fears over the coronavirus. The won fell sharply against the dollar.

The Kospi closed under the 2,000 mark at 1,954.77 on Monday, down 85.45 points, or 4.19 percent.

The main index nosedived in the morning as investors rushed to safe havens such as bonds and the Japanese yen amid risk-averse sentiment in the financial markets, analysts said.

Adding another unexpected worry to markets, Saudi Arabia, the world’s biggest oil exporter, vowed to release its inventory oil.

“Saudi Arabia’s move appears to be aimed at punishing Russia, as it balked at production cuts proposed by the Organization of the Petroleum Exporting Countries (OPEC) amid the spreading coronavirus outbreak,” Noh Dong-kil, an analyst at NH Investment & Securities, said over the phone.

Foreign and institutional investors sold a combined 840 billion won ($698 million) worth of stocks, outpacing individuals’ stock purchases valued at 797 billion won.

Most large-cap stocks were down.

Samsung Electronics plunged 4.07 percent, SK hynix declined 6.16 percent, Hyundai Motor shed 5.88 percent, and the local steelmaker Posco was down 5.99 percent.

Among gainers, the state-run utility Korea Electric Power climbed 8.06 percent, closing at 22,800 won.

The secondary Kosdaq was down 28.12 points, or 4.38 percent, to close at 614.60.

In the Kosdaq market, stocks of local medical firm Osangjaiel spiked to the market limit of 30 percent amid news Monday that Italian health regulators will allow the use of coronavirus test kits made by its affiliate company.

The local currency was trading at 1,203.30 won against the dollar, up 11.0 won from the previous session’s close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year bonds lost 2.6 basis points to 1.054 percent, and the return on the benchmark 10-year government bond shed 14.9 basis points to reach 0.76 percent.

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