The benchmark Korea Composite Stock Price Index (KOSPI) nosedived 133.56 points, or 8.39 percent, to settle at 1,457.64. Trading volume stood at 965.2 million shares worth 11.8 trillion won (9.2 billion U.S. dollars).
It was the lowest close in over 10 and a half years since July 2009 when the aftermath of the global financial crisis roiled financial markets across the globe.
In terms of points, the 133.56-point drop was the biggest-ever daily decline, surpassing the previous high of 126.50-point slide tallied in October 2008.
The KOSPI started 2.2 percent higher, but it turned downward and extended losses as unease rose over the economic fallout from the coronavirus outbreak.
Fiscal and monetary stimulus packages were announced from Europe and the United States, but the measures failed to relieve market anxieties.
South Korea unveiled extra budget worth 11.7 trillion won (9.1 billion U.S. dollars) and slashed its target rate to an all-time low of 0.75 percent earlier this week.
VKOSPI, the volatility index to gauge market fears, soared 10.25 percent to 69.24, the highest in over 11 years since November 2008.
Foreign investors dumped local stocks for the 11th consecutive day, sending the KOSPI and the small-cap KOSDAQ more than 8 percent lower.
The bourse operator issued a circuit breaker on both the KOSPI and the KOSDAQ at 12:05 p.m. local time to suspend trading for 20 minutes. It is issued when stocks drop over 8 percent for more than a minute.
It marked the second time that the circuit breaker was activated both in the KOSPI and the KOSDAQ in a single day. The latest issuance was made on March 13.
The KOSDAQ dropped 56.79 points, or 11.71 percent, to finish at 428.35. It was the lowest close in nearly eight and a half years since October 2011.
In accordance with the stock market rout, the South Korean currency plunged versus the dollar.
The won/dollar exchange rate soared 40.0 won to close at 1,285.7 won per dollar, marking the highest in more than 10 and a half years since July 2009.
It was the biggest daily spike in about 10 years since March 2009. Foreigners dumped emerging currencies, including the South Korean won, as risk-off sentiment deepened broadly.
Bond prices fell sharply as offshore investors reduced holdings of emerging market assets.
Yields on the liquid three-year treasury notes jumped 14.3 basis points to 1.193 percent, and the return on the 10-year government bonds advanced 15.5 basis points to 1.657 percent.
The BOK announced plan to directly purchase 1.5 trillion won (1.2 billion U.S. dollars) worth of government bonds to help stabilize the domestic bond market.
Large-cap shares lost ground. Market bellwether Samsung Electronics sank 5.8 percent, and memory chip giant SK Hynix dived 5.6 percent. Samsung BioLogics, the biopharmaceutical unit of Samsung Group, tumbled 8.6 percent, and biopharmaceutical behemoth Celltrion plunged 10.8 percent.
Leading chemical firm LG Chem plummeted 17.9 percent, and the biggest automaker Hyundai Motor dropped 10.3 percent.
Airline shares nosedived more than 20 percent as countries around the world tightened immigration procedures or banned inbound travelers to prevent the COVID-19 cases from being imported.
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