Stocks drop almost 1% as investors question valuations

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Stocks drop almost 1% as investors question valuations

Published: 21 Sep. 2020, 18:26

A screen shows the closing stats for the Kospi in a trading room at Hana Bank in Jung District, central Seoul, Monday. [NEWS1]

The Kospi fell below the 2,400 mark on Monday, as lingering valuation pressure drove down the key index. The won rose against the dollar.

The benchmark Kospi lost 23.01 points, or 0.95 percent, to close at 2,389.39.

Trading volume was high at about one billion shares worth some 14 trillion won ($12.1 billion), with losers outnumbering gainers 694 to 168.

Foreigners sold a net 72 billion won, while retail investors purchased a net 46 billion won. Institutions bought a net 33 billion won.

The Kospi closed lower after a choppy session. Losses in bio and chemical heavyweights led the index's fall.

Valuation concerns weighed heavily on the local stock markets after the key stock index exceeded the psychologically important 2,400 level. The reading is widely seen as a sign of market confidence in the pandemic-hit economy.

Analysts predicted more days of choppy trading to come, citing an absence of market events to vent the valuation pressure.

"With the earnings season far away and profit forecast left unchanged, the Kospi was doomed to fall," Choi Yoo-joon, a researcher at Shinhan Financial Investment, said.

Most large caps closed lower in Seoul.

Samsung Electronics edged down 0.17 percent to 59,200 won, while chipmaker SK hynix advanced 0.96 percent to 84,500 won.

Chemical maker LG Chem plunged 5.86 percent to 627,000 won, and rechargeable battery maker Samsung SDI shed 1.55 percent to 446,000 won.

Amorepacific lost 1.19 percent to 166,500 won, and Korean Air gained 0.27 percent to 18,850 won.

Pharmaceutical firm Samsung Biologics fell 2.37 percent to 740,000 won, and Celltrion sank 4.46 percent to 278,500 won.

Naver retreated 2.01 percent to 292,000 won, with Kakao down 2.28 percent to 364,500 won.

NCSoft lost 2.07 percent to 804,000 won, while rival Netmarble rose 1.08 percent to 188,000 won.

The local currency closed at 1,158 won against the dollar, down 2.3 won from the previous session's close.

The Kosdaq dropped 21.89 points, or 2.46 percent, to close at 866.99.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year bonds lost 0.4 basis points to 0.904 percent, and the return on 10-year bonds rose 0.8 basis points to 0.69 percent.

BY CHEA SARAH, YONHAP [chea.sarah@joongang.co.kr]