Yahoo Finance South Korea Stocks Plummet as Foreign Investors Shed $317 Million Net of KOSPI Shares
The major Asia-Pacific stock indexes continued to plunge on Thursday despite the announcement of additional financial aid from the European Central Bank (ECB) and the Reserve Bank of Australia (RBA). The catalysts behind the selling were fears over the economic impact of the coronavirus pandemic
Not only did the major stock indexes plummet, but the selling pressure also weighed on investor sentiment in in the Philippines and Indonesia.
On Thursday, Japan’s Nikkei 225 Index settled at 16552.83, down 173.72 or -1.04%. South Korea’s KOSPI Index closed at 1457.64, down 133.56 or -8.39% and Hong Kong’s Hang Seng Index finished at 21920.39, down 371.43 or -1.67%.
China’s Shanghai Index settled at 2702.13, down 26.63 or -0.98% and Australia’s S&P/ASX 200 Index finished at 4782.90, down 170.30 or -3.44%.
South Korea Stocks Plunge More Than 8% after Circuit Breaker Halt
South Korea stocks resumed their declines after benchmark indexes fell more than 8%, triggering circuit breakers for the second time in a week.
The KOSPI dropped 8.6% to its lowest level since 2009, and the tech-heavy KOSDAQ lost 9.1% to its lowest since 2011 after the suspension was lifted at 12:25 p.m. in Seoul.
Foreign investors sold some $317 million net of KOSPI shares Thursday, taking the sell-off into a 11th straight day. They’ve already pulled almost $11 billion net from the nation’s equity funds this year, some of the biggest withdrawals in the region, according to data compiled by Bloomberg.
Efforts by Korean regulators to contain the damage – including a short-selling ban eased buyback rules – have done little to assuage investors worried about the repercussions of the coronavirus, Bloomberg said.
RBA Reveals ‘Comprehensive Package’
The Reserve Bank of Australia (RBA) announced Thursday a “comprehensive package,” including a reduction in the cash rate target to 0.25%, to support the country’s economy as it grapples with the impact of the virus.
“At some point, the virus will be contained and the Australian economy will recover,” RBA Governor Philip Lowe said in a statement. “In the interim, a priority for the Reserve Bank is to support jobs, incomes and businesses, so that when the health crisis recedes, the country is well placed to recover strongly.”
ECB Announces Pandemic Emergency Purchase Programme
The European Central Bank (ECB) announced Wednesday a new Pandemic Emergency Purchase Programme that will use 750 billion Euros (approx. $821 billion) to purchase securities to help support the European economy.
“The ECB will ensure that all sectors of the economy can benefit from supportive financing conditions that enable them to absorb this shock,” the central bank said in a release. “This applies equally to families, firms, banks and governments. The Governing Council will do everything necessary within its mandate.”
This article was originally posted on FX Empire
