Stocks drop 1.8 percent as pandemic worry grips market

A screen at Hana Bank's trading room in central Seoul shows the Kospi closing at 2,963.00 points on Monday, down 54.73 points, or 1.81 percent, from the previous trading day. [NEWS1]

Stocks plunged nearly 2 percent Monday morning amid growing concern about the pandemic. The won fell steeply against the dollar.

The benchmark Kospi retreated 54.73 points, or 1.81 percent, to close at 2,963 points, the lowest closing since Dec. 2.

Trading volume was low at about 371 million shares worth some 8.5 trillion won ($7.1 billion), with losers outnumbering gainers 785 to 117.

Foreigners offloaded a net 558 billion won, and institutions dumped 570 billion won, while retail investors scooped up 1.1 trillion won.

After a weak start, the Kospi extended its losses in tandem with plunges in the Asian markets.

Concerns about the highly contagious Omicron variant of the new coronavirus worsened investor sentiment in Korea, Japan, China and other Asian countries.

Korea reported fewer than 6,000 new coronavirus cases for the first time in six days Monday due partly to less testing over the weekend, but the number of critically ill patients was at almost 1,000. The country has toughened social distancing measures, starting last weekend.

"The impact of the Omicron variant seems to have increased, compared to the beginning of this month," said Shinhan Investment analyst Choi Yoo-joon.

"Investors seem to be worried about the Omicron variant, which might hamper the economic recovery," he added.

Most large caps closed lower in Seoul.

Samsung Electronics shed 1.15 percent to 77,100 won, and chipmaker SK hynix decreased 1.23 percent to 120,500 won.

Internet portal operator Naver retreated 2.99 percent to 373,000 won, and Kakao slumped 3.83 percent to 113,000 won.

LG Chem tumbled 5.88 percent to 656,000 won, and automaker Hyundai Motor lost 2.15 percent to 205,000 won.

Samsung Biologics fell 2.09 percent to 935,000 won and battery maker SK Innovation plunged 5.22 percent to 218,000 won.

The Kosdaq fell 10.75 points, or 1.07 percent, to close at 990.51.

The local currency closed at 1,190.8 won against the dollar, up 9.9 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds lost 3.2 basis points to 1.741 percent, and the yield on the benchmark 10-year government bond fell 1 basis point to 1.4 percent.

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