(Bloomberg) — South Korean stocks jumped after regulators reimposed a full ban on short-selling for about eight months, a controversial move that they said was needed to stop the illegal use of a trading tactic deployed regularly by hedge funds and other investors around the world.
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The move may have been to appease retail investors who have complained about the impact of shorting — the selling of borrowed shares by institutional investors — ahead of elections in April, several market watchers said. However, it could deter participation by foreign funds in the $1.7 trillion equity market and complicate Korea’s bid to seek a developed-market status in MSCI Inc.’s indexes.
The Kospi jumped as much as 4.1%, the most since January 2021. Overseas investors were big buyers on a net basis, indicating that funds were covering short positions. Stocks that had…
