Kospi falls 1 percent as coronavirus cases rise

A screen shows the final figure for the Kospi in a dealing room at KB Kookmin Bank in the financial district of Yeouido, western Seoul, on Wednesday. [NEWS 1]

Shares dipped nearly 1 percent Wednesday as a new coronavirus cluster infection threatened hopes for quick economic recovery. The won rose against the dollar.

The benchmark Kospi fell 22.67 points, or 0.94 percent, to close at 2,380.48.

Trading volume was moderate at about 880 million shares worth some 10.5 trillion won ($9.2 billion), with losers outnumbering gainers 638 to 227.

Foreigners sold a net 38 billion won and institutions offloaded a net 376 billion won, while retail investors purchased a net 415 billion won.

The Kospi was down for a second consecutive session, widening losses toward the session's close.

Investor sentiment worsened amid concerns that a new cluster infection in the southeastern port city of Busan could lead to a mass outbreak.

"News reports about the large-scale infections in Busan seem to have accelerated the sell-offs [of local stocks]," Kiwoom Securities analyst Seo Sang-young said.

Losses also deepened over worries that the new U.S. stimulus plan is losing steam ahead of the November presidential election.

Investor disappointment also grew after Covid-19 vaccine developers, including Eli Lilly & Co. and J&J, halted their clinical tests due to safety concerns.

Earlier in the day, the Bank of Korea (BOK) froze its key interest rate at a record low of 0.5 percent as widely expected. An export slump and Covid-19 flare-ups have somewhat eased, but consumption has slowed due to the protracted pandemic, the BOK noted.

In Seoul, most large caps closed lower.

Samsung Electronics closed flat at 60,900 won, and chipmaker SK hynix shed 1.93 percent to 86,500 won.

Pharmaceutical firm Samsung Biologics lost 2.21 percent to 707,000 won, and Celltrion declined 3.14 percent to 262,000 won.

Internet portal Naver gained 1.19 percent to 298,500 won, but its rival Kakao retreated 0.94 percent to 368,500 won.

Chemical maker LG Chem fell 2.48 percent to 628,000 won, and rechargeable battery maker Samsung SDI dropped 1.57 percent to 438,500 won.

Hyundai Motor slipped 0.56 percent to 178,000 won, with steelmaker Posco dipping 2.2 percent to 200,500 won.

The Kosdaq fell 10.44 points, or 1.2 percent, to close at 861.48.

The local currency closed at 1,146.9 won per dollar, down 0.2 won from the previous session's close.

Bonds, which move inversely to yields, finished higher. The yield on three-year bonds fell 2.4 basis points to 0.901 percent, and the return on 10-year bonds fell 4.5 basis points to 0.72 percent.

BY LEE JEE-YOUNG, YONHAP [lee.jeeyoung1@joongang.co.kr]