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A person passes in front of a monitor displaying the KOSPI at the close of trading at KEB Hana Bank headquarters in Myeongdong on Tuesday. (Yonhap News)

The benchmark Korea Composite Stock Price Index (KOSPI) fell to its lowest level of the year on Tuesday due to concerns over the new COVID-19 variant, Omicron.

KOSPI plunged 2.42% (70.31 points) on Tuesday to close at 2,839.01, the lowest since Dec. 29, 2020. The decline was the steepest this year since Feb. 26 (-2.8%).

The KOSPI started on a high due to the rebounding US stock market but began its descent at around 10 am, when news broke that two travelers who arrived in Ulsan from areas where the Omicron variant had been detected were confirmed to have contracted COVID-19. 

According to the Ulsan Metropolitan Government, of the five people who were confirmed to have COVID-19 in the city Tuesday, two had entered the country from the Netherlands and Germany on Sunday and Monday, respectively.

Investors recoiled in the afternoon after news broke that Omicron had been detected in Japan. Remarks by Moderna’s CEO Stephane Bancel reported in the Financial Times that existing vaccines may struggle against the new variant fueled the downward spiral.

Foreigner investors — who were recording purchases early on — started to sell, while domestic institutions sold off a net 636.6 billion won (US$539.8 million) worth of stocks.

The KOSPI fluctuated 120.2 points (4.13%) on Tuesday, a reflection of investors’ anxiety.

All sectors except health technology took a hit. The KOSDAQ index also fell 2.69% (26.71 points), closing at 965.63.

As Korea’s stock market plunged, stock markets around Asia, which had been on the rise, also faltered. The Nikkei 225 in Japan declined 1.63%, while the decline of Hong Kong’s Hang Seng Index steepened. US futures also appear to be on the decline.

At the same time, the won has strengthened due to the turnaround of the dollar. The won-dollar exchange rate closed at 1.187.9 won to the dollar, down 5.1 won (raising the value of the won), in the Seoul foreign exchange market.

By Han Gwang-deok, finance correspondent

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