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Seoul: Stocks, won suffer worst day since July 2009 on virus panic
[SEOUL] South Korean shares plunged more than 8 per cent on Thursday to a near 11-year low, triggering circuit breakers, as panic over the coronavirus overshadowed global policy efforts to calm financial markets. The South Korean won plunged to its lowest since July 2009, while the benchmark bond yield soared.
The benchmark Kospi closed down 133.56 points, or 8.39 per cent, to 1,457.64, marking the lowest close since July 17, 2009. It sunk as much as 9.5 per cent earlier in the session and has fallen 33.67 per cent so far this year.
The Korea Exchange said on Thursday circuit breakers were triggered on the benchmark Kospi and the junior Kosdaq to halt all trading for 20 minutes as shares plunged more than 8 per cent each for over a minute.
The country's president on Thursday pledged 50 trillion won (S$56.8 billion) in emergency financing for small businesses along with other stimulus measures to help shore up its economy.
The country also prepared crisis funds to put a floor under crashing bond and stock markets, with the bond market stabilisation fund to be larger than 10 trillion won.
Meanwhile, the Bank of Korea said it would conduct outright purchases of treasury bonds worth $1.16 billion to stabilise the bond market.
The country reported 152 new infections on Thursday, taking the national tally to 8,565.
"Future movements in financial markets are completely unpredictable, just as how hard it is to tell when the virus issue could settle down," said Lim Dong-min, an analyst at Kyobo Securities.
Foreigners sold around net US$490.80 million worth of shares on the main board.
The won closed at 1,285.7 per US dollar on the onshore settlement platform, 3.21 per cent lower than its previous close at 1,245.7 and to its weakest level since July 14, 2009.
The currency fell as much as 3.88 per cent in early trade, while it has lost 10.1 per cent so far this year.
The country's foreign exchange authorities issued a joint verbal warning against speculation on the currency market, and were seen selling dollars to curb further decline, multiple dealers told Reuters.
In offshore trading, the won was quoted at 1,276.3 per US dollar, down 1.6 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,272.8.
In money and debt markets, June futures on three-year treasury bonds sharply fell 0.72 points to 110.59.
The most liquid three-year Korean treasury bond yield rose by 15 bps to 1.195 per cent in late afternoon trade, while the benchmark 10-year yield rose by 15.7 bps to 1.655 per cent.