South Korea: Stocks hit over 4-yr low as virus cases jump, US stimulus disappoints

[SEOUL] South Korean shares ended at a more than four-year low on Wednesday, as new local coronavirus cases jumped and investors doubted whether Asian markets would benefit from Washington's stimulus package to tackle the coronavirus outbreak.

The benchmark KOSPI ended down 54.66 points, or 2.78 per cent, at 1,908.27, the lowest close since Feb 17, 2016.

The index has fallen 13.2 per cent so far this year.

Near-term rebound in the KOSPI seems unlikely, as a jump in new infections dented hopes that the virus outbreak in South Korea is being contained, Bookook Securities' analyst Lee Won said.

Mr Lee also said the big selloff in major tech shares by foreign investors piled downside pressure on the KOSPI, adding that the Seoul government's tightened rules on short-selling of stocks were unlikely to curb market volatility.

Starting on Wednesday, stocks with a sudden and abnormal increase in short-selling transactions will be suspended from further short-selling for 10 days. The current rule calls for short-selling to be suspended for just one day.

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Foreigners were net sellers of US$582.81 million worth of shares on the main board.

The country reported 242 new virus cases as of early Wednesday, reversing 11 days of slowing infections and bringing the national tally to 7,755. Total death toll from the virus was 60.

As US coronavirus cases jumped, the White House and Congress negotiated measures on Tuesday to bolster the US economy and Americans' paychecks, although the absence of any major announcements disappointed some investors.

REUTERS