Stocks rise, but short-selling ban end weighs on index

Stocks rebounded Thursday as investors sought oversold stocks after the benchmark index took a breather the previous session.

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 3,177.52 points on Thursday, up 5.86 points, or 0.18 percent from the previous trading day. [NEWS1]

Stocks rebounded Thursday as investors sought oversold stocks after the benchmark index took a breather the previous session. The won rose against the dollar.

The benchmark Kospi rose 5.86 points, or 0.18 percent, to close at 3,177.52 points.

Trading volume was moderate at about 1.7 billion shares worth some 14.6 trillion won ($13.1 billion), with gainers outnumbering losers 467 to 383.

Foreigners sold a net 149 billion won, and institutions offloaded a net 236 billion won, while retail investors purchased 349 billion won.

Stocks got off to a strong start after the Kospi slumped 1.52 percent the previous session under increased valuation pressure.

Investor sentiment remained strong, backed by rosy speculations about solid first-quarter earnings and progress in the local vaccine rollout against the new coronavirus.

But the Kospi trimmed part of its earlier gains in the afternoon, largely due to uncertainties related to the lifting of the short selling ban.

"The Kospi’s gain today was slower than expected," Eugene Investment & Securities analyst Huh Jae-hwan said.

"Undoing the short selling ban early next month seems to have directed investor attention away from large caps to small- and medium-cap stocks," he said.

The Financial Services Commission (FSC) banned short selling of stocks from March 16 for a six-month period, in a move to ease a market rout caused by the COVID-19 pandemic.

The temporary ban was extended twice, and short selling is set to resume on May 3.

In Seoul, Samsung Electronics retreated 0.24 percent to 82,400 won, but chipmaker SK hynix climbed 0.38 percent to 133,000 won.

Internet portal operator Naver closed unchanged from the previous session at 380,500 won, with its rival Kakao shedding 0.42 percent to 117,500 won.

Automaker Hyundai Motor edged up 0.22 percent to 226,000 won, and chemical firm LG Chem moved up 0.81 percent to 871,000 won.

The Kosdaq gained 3.49 points, or 0.34 percent to 1,025.71.

The local currency closed at 1,117.3 won to the dollar, down 1.3 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys lost 0.5 basis point to 1.105 percent, and the return on the benchmark ten-year government bond fell 0.1 basis point to 1.55 percent.

BY LEE TAE-HEE, YONHAP [lee.taehee2@joongang.co.kr]