Stocks drop as investors digest short selling decision

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Stocks drop as investors digest short selling decision

A screen at Hana Bank's trading room in central Seoul shows the Kospi closing at 3087.55 points on Thursday, down 42.13 points, or 1.35 percent, from the previous trading day. [NEWS1]

A screen at Hana Bank's trading room in central Seoul shows the Kospi closing at 3087.55 points on Thursday, down 42.13 points, or 1.35 percent, from the previous trading day. [NEWS1]

Stocks snapped their three-day winning streak Thursday, as foreign and institutional investors sought profits following a recent rally. The won fell against the dollar.
 
The benchmark Kospi fell 42.13 points, or 1.35 percent, to close at 3,087.55 points.
 
Trading volume was high at about 1.3 billion shares worth around 20.4 trillion won ($18.2 billion), with losers outnumbering gainers 539 to 305.
 
Foreigners sold a net 650 billion won, ending their three-day buying streak, while retail investors purchased a net 2.5 trillion won. Institutions offloaded a net 1.8 trillion won.
 
Stocks quickly fell to the negative terrain due to strong foreign and institutional selling, after the key index rallied 5.2 percent in the past three sessions.
 
Analysts said the government's recent extension of a short selling ban also affected the foreign selling.
 
"The extended short selling ban would not be a positive event in the eyes of foreign investors, because it would never be helpful in their hedging strategies," Eugene Investment & Securities analyst Huh Jae-hwan said.
 
Most large caps closed lower in Seoul.
 
Samsung Electronics lost 2.48 percent to 82,500 won, and chipmaker SK hynix shed 3.85 percent to 125,000 won.
 
Samsung Biologics declined 1.45 percent to 813,000 won, and Celltrion retreated 1.73 percent to 341,500 won.
 
The country's largest automaker Hyundai Motor added 1.22 percent to 248,500 won, with its smaller affiliate Kia gaining 0.41 percent to 98,100 won. Auto parts maker Hyundai Mobis rose 3.02 percent to 358,000 won.  
 
Naver lost 3.37 percent to 358,000 won, and its rival Kakao dropped 1.62 percent to 454,500 won.
 
Online game maker NCSoft plunged 4.56 percent to 962,000 won, while its rival Netmarble lost 5.15 percent to 138,000 won.
 
Chemical firm LG Chem edged up 0.1 percent to 1 million won, while rechargeable battery maker Samsung SDI moved down 1.45 percent to 747,000 won.
 
The Kosdaq fell 6.11 points, or 0.63 percent to close at 964.58.  
 
The local currency closed at 1,118.5 won against the dollar, up 3.6 won from the previous session's close.
 
Bond prices, which move inversely to yields, closed lower. The return on the three-year bond added 0.4 basis points to close at 0.984 percent, and the return on the 10-year bond gained 3.7 basis points to close at 1.13 percent.  
 
BY CHEA SARAH, YONHAP   [chea.sarah@joongang.co.kr]
 
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