Stocks decline 3 percent on Covid-19 double-hit

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Stocks decline 3 percent on Covid-19 double-hit

Published: 20 Aug. 2020, 19:49 Updated: 20 Aug. 2020, 21:43

A screen shows the closing figure for the Kospi in a trading room at KB Kookmin Bank in the financial district of Yeouido, western Seoul, on Thursday. [YONHAP]

Stocks tumbled more than 3 percent Thursday amid growing concerns over an increase in the number of coronavirus cases in the country and uncertainties over the recovery of the U.S. economy. The won fell against the dollar.

The benchmark Kospi lost 86.32 points, or 3.66 percent, to close at 2,274.22. Trading volume was high at about 891 million shares worth some 16.9 trillion won ($14.2 billion), with losers outnumbering gainers 823 to 73.

Foreigners sold a net 276 billion won, while retail investors purchased a net 1.1 trillion won. Institutions offloaded a net 821 billion won.

Stocks got off to a weak start and extended losses in the afternoon session amid spiking Covid-19 infections in the greater capital area.

Korea added 288 new cases of Covid-19 on Thursday. More than 1,500 cases have been newly identified since Friday.

"The unexpected flare-up of Covid-19 infections will inevitably undermine investors' hopes of a quick economic recovery," Shinhan Investment analyst Lee Ye-shin said.

Investor sentiment also weakened following the U.S. Federal Reserve's statement that the Covid-19 crisis will "weigh heavily" on the world's largest economy.

Lingering trade tensions between the United States and China also added to the risk-averse sentiment among investors.

Most large caps traded lower in Seoul.

Samsung Electronics plunged 4.15 percent to 55,400 won, with No. 2 chipmaker SK hynix sinking 4.27 percent to 71,800 won.

Samsung Biologics lost 1.85 percent to 794,000 won, while Celltrion advanced 1.64 percent.

Hyundai Motor plummeted 5.78 percent to 155,000 won, and LG Chem retreated 2.34 percent to 667,000 won.

Naver lost 3.02 percent to 305,500 won, with its rival Kakao dipping 3.19 percent to 364,500 won.

The local currency was trading at 1,186.9 won against the dollar, up 5.70 won from the previous session's close.

The Kosdaq lost 27.60 points, or 3.37 percent, to close at 791.14.

Bond prices, which move inversely to yields, ended lower. The yield on three-year bonds rose 0.8 basis points to 0.812 percent, and the return on 10-year bonds rose 1.7 basis points to 0.68 percent.

BY LEE JEE-YOUNG, YONHAP [[email protected]]