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S.Korean stocks trim losses after plunging over 8 pct

Xinhua News,SEOUL
2020-03-13 16:45

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South Korean stocks ended 3.4 percent lower Friday, as it trimmed earlier losses after plunging over 8 percent and triggering a trading halt.

The benchmark Korea Composite Stock Price Index (KOSPI) dived 62.89 points, or 3.43 percent, to settle at 1,771.44. Trading volume was heavy at 991.5 million shares worth 13 trillion won (10.7 billion U.S. dollars).

Fears of the global economic recession from the COVID-19 outbreak battered market sentiment.

The Dow Jones Industrial Average dropped 10 percent overnight in its worst day since the Black Monday crash of 1987, leading foreign investors to dump South Korean stocks.

The bourse operator issued a circuit breaker on the main bourse in the morning trading after the KOSPI nosedived over 8 percent for more than a minute. It suspended stock trading for 20 minutes.

It was the first time in over 18 years that the circuit breaker was activated in the main bourse.

Just six minutes after the open, a sidecar was imposed on the main bourse for the second consecutive day to halt a computer-programmed trading for five minutes. It is activated when stock futures fluctuate over 5 percent for at least a minute.

The KOSPI pared earlier losses on expectations for fiscal stimulus packages from major economies.

The South Korean government announced 11.7 trillion won (9.6 billion U.S. dollars) of supplementary budget last week to bolster private consumption and help fight against the COVID-19.

The small-cap KOSDAQ plummeted 39.49 points, or 7.01 percent, to close at 524.00. The circuit breaker and sidecar were imposed on the tech-savvy market in the morning trading after the index tumbled over 8 percent.

It was the first time that the circuit breaker and the sidecar were activated both in the KOSPI and the KOSDAQ in a single day.

Large-cap shares lost ground. Market bellwether Samsung Electronics declined 1.7 percent, and memory chip giant SK Hynix slipped 0.4 percent. The most-used search engine Naver shrank 0.3 percent, and leading chemical firm LG Chem shed 0.3 percent.

Samsung BioLogics, a biopharmaceutical unit of Samsung Group, dropped 5.5 percent, and the biggest automaker Hyundai Motor tumbled 8.2 percent.

Foreigners dumped the domestic currency and the local bonds amid the mounting risk-off sentiment.

The won/dollar exchange rate advanced 12.8 won to finish at 1,219.3 won per dollar. The rate surged to 1,226 won in early trading, marking the highest in about four years.

Bond prices ended lower. Yields on the liquid three-year treasury notes gained 8.7 basis points to 1.149 percent, and the return on the 10-year government bonds soared 18.3 basis points to 1.570 percent.
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