LS Electric falls sharply on first day of inclusion in MSCI Korea index

LS Electric Co. plunged more than 9% on Monday, the first day of its inclusion in the Morgan Stanley Capital International (MSCI) Korea Index.

On the Kospi market, LS Electric closed at 151,700 won, down 9.11% from the previous trading day.

Earlier, MSCI announced the inclusion of LS Electric as a new constituent of the Korea Index at its August review. Monday is the effective date of the change in the index.

Experts have advised investors to be wary of the volatility of LS Electric's stock price.

“Stocks that are included in the index tend to increase in price from 60 days before the rebalancing,” said Dong-gil Rho, an analyst at Shinhan Investment & Securities last month.

”It is important to note that the price of the stock may fall in the short term immediately after the inclusion,” he added.

Write to Young-gi Jin at young71@hankyung.com