S. Korean stocks sink 4%, won plumbs six-month low
O Kospi skids the most in over 16 months, foreigners net sellers
A worker from the Korea Pest Control Association sprays disinfectant to help prevent the spread of the COVID-19 novel coronavirus at a market in Seoul yesterday.
SEOUL: South Korean stocks slumped nearly 4% and the won slid yesterday, as the unabating spread of the coronavirus heightened concerns about the toll on Asia’s fourth-largest economy.
The government yesterday reported 161 new virus cases, bringing the total number of infections to 763. The Korea Centres for Disease Control and Prevention also reported the seventh death from the virus.
The rising cases outside of China, where the oubreak originated, have fanned worries over global supply chain disruptions and fuelled demand for safe haven assets.
“While the coronavirus is probably slowing in China, it is speeding up elsewhere,” said Charles Gillams at RJMG Asset Management.
The benchmark Kospi closed down 3.87%, marking the sharpest one-day fall since early October 2018. The index has fallen for three sessions in a row and ended at its lowest since Dec 5, 2019.
“At this rate, South Korea’s first-quarter GDP (gross domestic product) will apparently contract from the previous quarter,” said Byun Juno, chief of the research centre at Eugene Investment & Securities.
“If a rate cut is inevitable during the first half of 2020, the Bank of Korea is increasingly likely to cut the rate preemptively this week,” he added. The central bank is due to hold a monetary policy review on Thursday.
Amid broad-based falls, market heavyweights Samsung Electronics and SK Hynix stumbled 4% and 3.4%, respectively. Of the total traded issues of 905, merely 49 of them rose.
Yesterday, foreigners were net sellers of about 787 billion won (RM2.72 billion) on the main board, the biggest since November last year. So far this month, they have offloaded around 638.5 billion won worth of Kospi stocks.
Convenience food manufacturers including CJ Seafood, Seoul Food, as well as shipping company Han Express surged 30% each to hit their intraday price limit, as people steered clear of dining-out.
The trade-sensitive won also wobbled. The won was quoted at 1,220.2 per dollar on the onshore settlement platform 0.90% lower than its previous close at 1,209.2, its lowest finish since Aug. 13, 2019.
The Kospi has fallen 5.4% so far this year, while the won has lost 5.2% against the dollar during the same period.
Of the other Asian markets, Hong Kong shed 1.8%, with Sydney, Bangkok and Manila each dropping more than 2%. Taipei, Jakarta, Singapore and Wellington were all off more than 1%. Mumbai eased 1%.
Shanghai was off 0.3%, with losses tempered by a series of economy-boosting measures including support for businesses and other stimulus measures.
European stock markets sank at the start of trade yesterday, with the heaviest falls in Italy after it confirmed the nation’s fourth death from the deadly coronavirus outbreak.
In early morning deals, Milan’s FTSE MIB benchmark shares index tumbled 4.3%. Elsewhere in Europe, London sank 2.6%, Frankfurt slumped 3.3% and Paris dived 3.4%. – AFP, Reuters