South Korea’s local stock barometer wiped out its gains so far this year after foreign investors exited due to ongoing concerns involving the new COVID-19 variant.
- The country’s benchmark dropped by 2.4% on Monday after reports that current COVID-19 vaccines could struggle against the newly detected Omicron variant. This brought the index down 14% from its record seen on July 6.
- The decline was attributed to the outflows of overseas funds, while local investors have stuck to niches such as the metaverse after the Kospi climbed to the top-performing major index in 2020 amid the retail frenzy.
- Analysts believe the South Korean stock market is reacting “sensitively” to the new variant of the virus as there are no major buyers, and retail investors have been limiting their purchases.
- Foreign funds have recorded a net 1.16 trillion won in Kospi stocks since the start of October, erasing the gains recorded in September. The loser list includes Samsung Electronics Co., which recorded a net outflow of 1.74 trillion.
Retail investors have been focused mainly on stocks and exchange-traded funds related to the metaverse.
KS11 closed down 2.42, while FB is down 0.72%.
Source: Bloomberg