* KOSPI plunges 3%, foreigners net sellers
* Korean won hits 3-week low vs dollar
* South Korea benchmark bond yield falls
SEOUL, Jan 28 () – South Korean shares fell more than
3% on Tuesday as investors worried about the impact of the
fast-spreading coronavirus on the Chinese economy.
More than 100 people have died from the virus and over 5,000
have been confirmed infected. The rising death toll prompted the
United States and Canada to warn against visiting China.
As of 0314 GMT, the KOSPI was down 74.00 points, or
3.29%, to 2,172.13, the lowest since Jan. 8. The junior KOSDAQ
also shrank more than 3%.
« The coronavirus may hamper South Korea’s growth rate and
exports performance, though it’s difficult to affirm how far the
impact would be, as this is early stage of the outbreak, » said
Byun Juno, head of Eugene Investment & Securities research
« Investors are on edge, closely monitoring news. The
benchmark index’s sharp fall is pre-emptively mirroring their
caution, » he noted.
Before the market resumed trading after Lunar New Year
holiday, Seoul’s finance minister vowed to stabilize financial
markets should volatilities worsen. The country confirmed the
fourth case of the China-linked virus.
The infectious disease took a heavy toll on stocks exposed
to China, South Korea’s biggest trading partner, and those of
airlines on concerns that the spreading virus would hit tourism.
China’s National Immigration Administration encouraged its
citizens to reconsider the timing of overseas travel.
South Korea’s top 2 airlines, Korean Air Lines
and Asiana Airlines , dropped 6% and 5%,
respectively. Cosmetic makers highly dependent on Chinese
tourists coming to Seoul also plunged.
Bucking the trend, drugmakers surged on hopes of higher
demand for their products, with Kukje Pharma and
Woojung Bio adding 24% and 21%, respectively.
The Korean won opened sharply lower tracking the yuan’s
drop. The won fell as low as 1178.50 per dollar to its weakest
since Jan. 8.
As investors rushed into safe havens, the benchmark bond
yield fell. The most liquid 3-year Korean treasury bond yield
fell by 6.7 basis points to 1.355%, while the benchmark 10-year
yield fell by 11.1 basis points to 1.594%.
Foreigners offloaded more than 300 billion won ($257.03
million) worth of shares on the main board on Tuesday.
The trading volume during the session in the KOSPI index
was 359.63 million shares and of the total traded issues
of 907, the number of advancing shares was 83.
($1 = 1,167.2000 won)
(Reporting by Hayoung Choi; Editing by Shounak Dasgupta)
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