SEOUL, May 3 (Yonhap) — South Korean stocks slumped for a fifth day on Monday, the first day of partially resumed short selling, as concerns of a virus flare-up and bio losses drove down the key stock index. The Korean won fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 20.66 points, or 0.66 percent, to close at 3,127.2 points.
Trading volume was moderate at about 1 billion shares worth some 16.7 trillion won (US$14.9 billion), with losers outnumbering gainers 509 to 359.
Foreigners sold a net 441 billion won, while retail investors purchased 586 billion won. Institutions offloaded a net 137 billion won, extending their selling streak to a ninth session.
The KOSPI got off to a choppy start, as investors took to the sidelines on the first day of partially resumed short selling.
The key stock index fluctuated between gains and losses after a four-session losing streak, as investors weighed the outlook for listed firms’ performance.
Short selling is a trading strategy in which investors sell stocks they borrowed on the belief that share prices will fall in the near future. When the prices decline, they can buy back the stocks at lower prices, pocket the profit and return the shares to the original owner.
From Monday, the country’s financial authorities lifted short selling ban on 200 market heavyweights on the main bourse and 150 companies on the tech-laden Kosdaq market.
In March last year, the authorities banned the trading practice over a stock market rout triggered by the COVID-19 pandemic.
“The resumed short selling may have had a certain impact on today’s trading, but it would take more time for foreigners and institutions to actively practice the short selling, given the current circumstances of the financial market,” Eugene Investment & Securities analyst Huh Jae-hwan said.
In addition, lower-than-expected supply of the new coronavirus vaccine increased worries of the spreading virus outbreaks, analysts said.
“In (today’s) KOSPI market, positive impacts from the improved corporate earnings seem to have been offset by concerns that COVID-19 cases may surge again,” Mirae Asset Securities analyst Seo Sang-young said.
Chip and auto large caps closed higher in Seoul, while bio sector slumped.
Market kingpin Samsung Electronics added 0.25 percent to 81,700 won, and No. 2 chipmaker SK hynix advanced 2.73 percent to 131,500 won.
Top pharmaceutical firm Samsung Biologics shed 3.86 percent to 773,000 won, with Celltrion dipping 6.2 percent to 249,500 won. The country’s largest automaker Hyundai Motor climbed 2.83 percent to 218,000 won.
Internet portal giant Naver moved up 0.97 percent to 363,000 won, while chemical maker LG Chem retreated 2.68 percent 907,000 won.
The local currency closed at 1,124.0 won to the U.S. dollar, down 11.7 won from the previous session’s close.
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys added 0.8 basis point to 1.149 percent, and the return on the benchmark five-year government bond rose 0.6 basis point to 1.636 percent.