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An electronic board showing the Korea Composite Stock Price Index at a dealing room of the Hana Bank headquarters in Seoul on Tuesday (Yonhap) |
South Korean stocks ended more than 2.3 percent lower Tuesday as investors took profit following the previous session's sharpest-ever daily gains prompted by the country's reimposing of a ban on stock short selling. The local currency sharply fell against the greenback.
The benchmark Korea Composite Stock Price Index sank 58.41 points, or 2.33 percent, to close at 2,433.96, bringing its four-session winning streak to a close.
Trading volume was moderate at 447.6 million shares worth 11.38 trillion won ($8.6 billion), with losers outnumbering gainers 634 to 244.
On Monday, the Kospi recorded its largest daily gain of 134.03 points, climbing 5.66 percent, buoyed by the short selling ban that will be in place until the end of June 2024.
Financial authorities cited concerns about growing market volatility from illegal short selling practices.
"Today's selling spree was due to investors taking profit from yesterday's large gains," Kim Seok-hwan, an analyst at Mirae Asset Securities, said.
Chung Yong-taek, an analyst at IBK Securities, also noted that the steep market gains in the previous session were an "irregular reaction" by the unexpected systemic change in the market system.
"In the past, even when short selling was prohibited, the market would typically rise about 6 percent in a span of one to two weeks. However, the Kospi jumped by more than 5 percent Monday alone," Chung said.
Most blue chips were rattled across the board, with top battery maker LG Energy Solution plunging 10.23 percent to 443,000 won and its smaller rival Samsung SDI plummeting 7.91 percent to 466,000 won.
Tech companies also fared worse, with No. 2 chip maker SK hynix slipping 1.95 percent to 130,400 won and home appliance giant LG Electronics finishing 1.8 percent lower at 103,400 won. Tech behemoth Samsung Electronics remained unchanged at 70,900 won.
Chemical and energy shares, which chalked up strong gains in the previous session, also suffered from steep losses.
LG Chem tumbled 5.57 percent to 492,000 won and leading refiner SK Innovation fell 7.07 percent to 144,500 won.
The local currency ended at 1,307.90 won against the US dollar, down 10.60 won from the previous session's close, following its rise in the past three consecutive sessions. (Yonhap)
