Stocks drop as second-wave fears weigh on sentiment
Stocks closed lower Thursday, ending a two-session rally, on investor concerns over a second wave of new coronavirus infections in the world's two largest economies. The won rose against the dollar.
The benchmark Kospi lost 7.57 points, or 0.35 percent, to close at 2,133.48. Trading volume was moderate at about 754 million shares worth some 10.8 trillion won ($8.9 billion), with winners outnumbering losers 523 to 331.
The drop was mainly attributed to growing investor concerns over the rising Covid-19 tolls in the United States and China.
"The index is likely to remain in the current situation of fluctuating near the 2,200-level, until concerns regarding a second wave of the Covid-19 ease out," Samsung Securities analyst Seo Jung-hun said.
Growing appetite for profit-taking after two winning sessions also kept the index from exceeding the 2,200-level, he added.
Seven states in the United States, including Texas, Florida and Oklahoma, posted record highs in either daily or weekly average new infections on Wednesday, local time. The increase fueled fears that the United States may consider reintroducing economic lockdowns.
Virus-related tallies also flared in China's capital city this week. The communist state is said to have suspended more than 60 percent of flights to Beijing, while closing schools and tightening social-distancing measures.
Escalating inter-Korean tensions added to investor concerns.
Foreigners sold a net 87.2 billion won, while retail investors purchased a net 149 billion won. Institutions offloaded a net 27.8 billion won.
Large caps traded mixed.
Samsung Electronics retreated 0.19 percent to 52,300 won, while SK hynix dipped 0.69 percent to 86,200 won.
Pharmaceutical firm Samsung BioLogics fell 1.70 percent to 810,000 won, with chemical maker LG Chem slipping 0.10 percent to 491,000 won.
Kakao climbed 0.19 percent to 263,500 won, while Naver shed 1.39 percent to 247,500 won.
Shares related to defense traded mixed. Korea Aerospace Industries inched up 0.19 percent while Hanwha Aerospace fell 2.18 percent.
The Kosdaq added 1.93 basis points or 0.26 percent closing at 737.33
The local currency closed at 1,208.00 won against the U.S. dollar, down 5.90 won from the previous session's close.
Bond prices, which move inversely to yields, rose. The return on three-year bonds shed 3.2 basis points reaching 0.842 percent, and the return on the benchmark 10-year government bond inched down 2.3 basis points to reach 0.73 percent.
BY KANG JAE-EUN, YONHAP [firstname.lastname@example.org]