Foreigners extend selling streak to ninth day amid market rout
A currency trader drops his head at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, Tuesday, March 17, 2020. AP
Foreign investors extended their selling binge of local stocks to a ninth consecutive session, further exacerbating the already shaky investor sentiment hit hard by the coronavirus, data showed Tuesday.
Offshore investors dumped a net 1.01 trillion won (US$813.4 billion) worth of local stocks on Tuesday. The country's benchmark index, the KOSPI, extended its headlong fall to a fifth consecutive session by shedding 2.47 percent to close at 1,672.44 points.
Foreigners have been net sellers since March 5, having offloaded a total of 7.43 trillion won. They sold a net 1.31 trillion won on March 9, the largest daily total on record.
The massive sell-off came as investor sentiment has been hit by ongoing coronavirus disruption to the economy, prodding foreign investors to pull out part of their investments from emerging countries.
The U.S. Federal Reserve's emergency rate cut to a range of zero to 0.25 percent, as well as a quantitative easing plan worth US$700 billion, failed to prevent the market crash.
The Dow Jones industrial average tumbled as much as 12.93 percent on Monday (local time). Nasdaq and S&P also plummeted 12.32 percent and 11.98 percent, respectively.
The Bank of Korea (BOK) on Monday made its first emergency rate cut on in over 10 years, slashing the key rate by half a percentage point to 0.75 percent.
In the emergency rate cut meeting, BOK Gov. Lee Ju-yeol acknowledged that the COVID-19 spread much faster and wider than expected, and that an additional downward revision for the South Korean economy is inevitable.
The BOK earlier slashed its growth estimate for the South Korean economy to 2.1 percent from 2.3 percent forecast late last year. (Yonhap)