Stocks drop as virus spike weighs on sentiment

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 3,285.34 points on Wednesday, down 19.87 points, or 0.6 percent, from the previous trading day. [YONHAP]

Stocks closed lower Wednesday after hitting an all-time high the previous session amid growing concerns over a surge in new Covid-19 cases. The won sharply fell against the dollar on risk-averse sentiment.

The benchmark Kospi fell 19.87 points, or 0.6 percent, to close at 3,285.34 points.

Trading volume was moderate at about 1.1 billion shares worth some 14.3 trillion won ($12.7 billion), with losers outnumbering gainers 663 to 202.

Foreigners sold a net 343 billion won, and institutions offloaded a net 835 billion won. Retail investors scooped up a net 1.17 trillion won.

The main index got off to a weak start, weighed down by a spike in new virus cases despite expectations of robust corporate earnings in the April-June period.

Korea's daily new virus cases reached 1,212 Wednesday, the highest since late December, amid rising delta variant cases and loosened vigilance against the pandemic.

Authorities decided to extend social distancing rules in the greater Seoul area for another week and warned of enforcing stronger virus curbs unless the current situation is brought under control.

"The surge in new Covid-19 infections dampened investor sentiment," Mirae Asset Securities analyst Seo Sang-young said.

Worries over the spread of the virus and its variants drove up bio stocks on the secondary bourse.

The bio-laden Kosdaq closed up 0.23 percent to a new record high at 1,047.36 points.

Samsung Electronics fell 0.49 percent to 80,800 won, despite its estimate-beating second-quarter earnings guidance. Chipmaker SK hynix tumbled 1.2 percent to 123,500 won.

Internet portal operator Naver added 1.95 percent to 417,500 won, and its rival Kakao gained 2.22 percent to 161,000 won.

Automaker Hyundai Motor declined 1.69 percent to 232,000 won, and chemical firm LG Chem shed 0.11 percent to 872,000 won.

Pharmaceutical firm Samsung Biologics lost 0.59 percent to 845,000 won, and Celltrion edged down 0.19 percent to 266,500 won.

The local currency closed at 1,138.1 won against the dollar, up 8.4 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds lost 5.5 basis points to 1.41 percent, and the yield on the benchmark 10-year government bond lost 8.5 basis points to 1.35 percent.

BY LEE TAE-HEE [lee.taehee2@joongang.co.kr],YONHAP