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Seoul stocks nearly flat after roller-coaster ride on coronavirus fears

The benchmark bourse Kospi closed at 2,118.88 points, down 0.13 points, or 0.01 percent, from the previous session on Monday. (Yonhap)
The benchmark bourse Kospi closed at 2,118.88 points, down 0.13 points, or 0.01 percent, from the previous session on Monday. (Yonhap)

South Korean stocks ended nearly flat Monday, with fears of the rapid spread of the new coronavirus weighing down investor sentiments.

Stocks on China’s major exchanges plunged on the first trading session after an extended Lunar New Year holiday that lasted from Jan. 24 to Feb. 2, which dragged down local indexes here even further.

The benchmark bourse Kospi opened sharply lower at 2,086.61 points -- down 32.40 points, or 1.53 percent, from the previous session. The weak start continued early in the morning, but slightly rebounded in afternoon trading to close at 2,118.88. Foreign investors net sold 307.3 billion won ($257 million) worth of stocks.

The tech-heavy Kosdaq also began low at 630.68 points -- down 11.80 points, or 1.84 percent, from the previous session. The index fluctuated widely but ended strong at 646.85 points. Foreign and institutional investors scooped up undervalued shares, with net purchases amounting to 228.4 million won.

Investors have closely watched China’s stock indexes as trading resumed amid fears over the impact the novel virus will have on the world’s No. 2 economy.

Chinese stocks fell heavily, as investors dumped risky assets in response to deepened fears about the coronavirus outbreak. The SSE Composite Index (Shanghai) plunged 8.73 percent, while the Shenzhen Composite Index dropped 9.1 percent at the opening.

The SSE Composite Index and the Shenzhen Composite Index then dipped 7.72 percent to 2,946.61 points and 8.45 percent to 902.23 points, respectively.

Other major indexes in Asia, such as the Japan’s Nikkei 225 shed 1.01 percent at the closing bell. The Hong Kong’s Hang Seng Index began low but inched up 0.22 percent, to close at 26,370.59.

Market experts said the plunge in China’s stocks in the short term is inevitable, due to more than 20 times increased confirmed cases of the deadly virus, compared to data before the Lunar New Year holiday. However, they said the fluctuation of the local indexes will be limited.

“China’s stock exchanges have begun reducing the fall gradually. Further, (investors’) expectation over Chinese government’s active economic stimulus, the fluctuation of the Kospi index will likely be restrained,” said Seo Sang-young, an analyst at Kiwoom Securities.

The local currency closed at 1,195 won to the US greenback, up 3.20 won from the previous session’s close.

By Jie Ye-eun (