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Seoul stocks rebound as investors scoop up undervalued assets

A sign at the Korea Exchange shows that the Kospi and Kosdaq indexes rose more than 1 percent Tuesday, the result of investors buying undervalued stocks. (KRX)
A sign at the Korea Exchange shows that the Kospi and Kosdaq indexes rose more than 1 percent Tuesday, the result of investors buying undervalued stocks. (KRX)

South Korean shares rose more than 1 percent Tuesday as investors went bargain hunting, after COVID-19 fears led to the sharpest fall in 16 months in the previous session.

The benchmark Kospi opened slightly low at 2,075.55 -- down 3.49 points, or 0.17 percent, from the previous session. The index fluctuated between losses and gains in the early morning, then moved upward throughout the day to close at 2,103.61. Institutional and individual investors scooped up undervalued shares, with net purchases amounting to 724.1 billion won ($597.6 million).

The tech-heavy Kosdaq began nearly flat at 639.28 -- down 0.01 points from the previous session. As foreign and institutional investors net purchased a combined 206.7 billion won worth of stocks, it closed strong at 656.95 -- up 17.66 points, or 2.76 percent, from the previous session.

The country had reported 977 confirmed cases of COVID-19 and 10 deaths as of 4 p.m.

Other major indexes in Asia also felt the effects of the coronavirus scare. The SSE Composite Index (Shanghai) and Japan’s Nikkei 225 shed 0.60 percent and 3.34 percent, respectively, as of the closing bell. Hong Kong’s Hang Seng Index, however, rose 0.19 percent to close at 26,872.45.

Major stock market indexes also followed losses on Wall Street on Monday. The Dow Jones Industrial Average dipped 1031.61 points, 3.56 percent, to close at 27,960.80. The Nasdaq and the S&P 500 plummeted 3.71 percent and 3.35 percent, respectively, the same day.

“Fear over the COVID-19 virus is spreading throughout the world as the number of virus patients is rapidly surging. The Kospi index (reflects the fact that) investors tended to purchase shares, which had plummeted from the previous trading session,” said Seo Sang-young, an analyst at Kiwoom Securities.

“In the medium to longer term, it is yet premature to determine the COVID-19 outbreak is over. When the Kospi index is to fall below the mark of 2,050 points, it may be the chance for investors to scoop up shares,” said Lee Won, an analyst at Bookook Securities, calling for more focus on stock movements until this weekend since they show wide fluctuations.

The local currency closed at 1,210.3 won against the greenback -- up 9.9 won from the previous session’s close. A day earlier, the value of the Korean won against the US dollar had reached its lowest point in six months.

By Jie Ye-eun (yeeun@heraldcorp.com)
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