Stocks down again as China strengthens virus restrictions

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,405.27 points on Tuesday, down 14.23 points, or 0.59 percent, from the previous trading day. [YONHAP]

Stocks closed lower Tuesday as investors took to the sidelines amid woes over China's stricter virus restrictions. The won declined against the dollar.

The benchmark Kospi inched down 14.23 points, or 0.59 percent, to close at 2,405.27.

Trading volume was moderate at 531.5 million shares worth 7.1 trillion won ($ 5.2 billion) with losers outnumbering gainers 483 to 371.

Foreigners sold a net 35.7 billion won worth of stocks and institutional investors a net 3.7 billion won, while retail investors bought a net 27.6 billion won.

"The Kospi was faced with strong downward pressure while being void of favorable factors to provide upward momentum," analyst Lee Kyoung-min from Daishin Securities said.

He added investors were on the alert ahead of the release of the Fed's policy meeting minutes due this week, as well as the worsening Covid-19 situation in China.

In Seoul, most large-cap shares traded lower.

Samsung Electronics edged down 1.3 percent to 60,600 won, and SK hynix slid 1.27 percent to 85,200 won.

Auto shares lost ground. Hyundai Motor dipped 1.49 percent to 165,500 won and its affiliate Kia stayed flat at 65,200 won. Auto part maker Hyundai Mobis retreated 2.32 percent to 210,500 won.

Tech shares were also among the decliners. Naver dropped 1.10 percent to 180,500 won and Kakao shed 3.55 percent to 54,300 won.

Among gainers, Meritz Financial Holdings rallied by the daily permissible limit of 30 percent to 34,750 won, after the company announced it will merge with its securities and insurance arms. The two firms will be delisted from the Kospi after the combination, the company said in a regulatory filing.

The local currency closed at 1,356.6 won against the dollar, up 1.9 won compared with the previous session's close.

The Kosdaq fell 6.31 points, or 0.88 percent, to close at 712.26 points.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds lost 0.4 basis points to 3.829 percent, and the yield on 10-year government bonds added 0.7 basis points to 3.770 percent.

BY CHO JUNG-WOO, YONHAP [cho.jungwoo1@joongang.co.kr]