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| A digital board at a Hana Bank dealing room in central Seoul displays the benchmark KOSPI's closing level, Friday. KOSPI ended at 3,217.95 points, down 1.07 percent from the previous session. Yonhap |
By Kim Yoo-chul
South Korean stock markets ended lower on Friday as investor sentiment took a hit following the government's decision to raise social distancing guidelines to the highest level in the Seoul metropolitan area.
The Korea Composite Stock Price Index closed down 1.07 percent at 3,217.95 points, while the junior Kosdaq fell 0.54 percent to close at 1,028.93 points, according to data provided by the Korea Exchange (KRX), Korea's top stock exchange operator.
Korea's stock markets started lower following weak closing numbers in the United States, London and other European exchanges. Fears over the Delta variant of the coronavirus spreading rapidly sent stocks in the major bourses sliding, Thursday.
Market sentiment remained bearish during trading on Friday as investors feared that Korea's economic rebound may have already peaked, while there were also signs of a possible economic slowdown in China.
Early Friday morning, Prime Minister Kim Boo-kyum said that South Korea has decided to raise the social distancing rules to the highest level for two weeks, starting this Monday, July 12. He warned that the "record rise in new COVID-19 infection cases" had reached the "maximum crisis level." Market analysts remarked that the government's announcement about the reality of the new pandemic wave sapped investor sentiment.
The KOSPI briefly fell below 3,200 points, but rebounded as retail investors went bargain hunting for blue-chip stocks. Foreign investors sold a net 1.3 trillion won worth of Korean stocks, which was the largest daily sell-off since May 13. Retail investors purchased a net 1.8 trillion won worth of shares, while institutional investors unloaded a net 509 billion won of shares.
Samsung Electronics fell 0.63 percent to 79,400 won, while Naver dropped 1.54 percent to 415,500. SK hynix shed 1.65 percent to 119,500 won. Samsung Biologics decreased 0.7 percent to 857,000 won. LG Chem slumped 3.03 percent to 833,000 won, and the country's largest automaker, Hyundai Motor, lost 1.53 percent to 226,000 won. Among gainers, renewable battery maker Samsung SDI advanced 0.55 percent to 736,000 won, and SK Telecom gained 1.58 percent to 322,000 won.
"The intensity of the stock selling by larger investors wasn't as heavy as expected and I would say that the stock markets will experience a short-term correction with leisure, tourism, aviation and lifestyle stocks facing downward pressure. If the government announces the scheduled arrival of vaccines, that should limit the markets' further decline," Kim Young-hwan, an analyst at NH Investment & Securities, said.
Some 10 percent of the country's population of 52 million people have been fully vaccinated, while 30 percent have received at least one shot, the majority of them aged over 60. South Korea aims to inoculate at least 70 percent of its residents with the first dose by the end of September.
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