SEOUL, Feb 3 (Reuters) - South Korea's financial regulator said on Wednesday it will extend its ban on short-selling of shares on the benchmark KOSPI and the junior KOSDAQ to May 2, but added it will partially lift the ban afterwards.

The Financial Services Commission (FSC) said in a statement it would extend the current ban until it partially lifts the short-selling ban on KOSPI 200 and KOSDAQ 150 stocks starting from May 3.

The extension comes as a swarm of online traders in South Korea took a leaf from a group retail investors in the United States, known as the Reddit horde, to quash a government plan to lift a pandemic-imposed ban on short-selling, triggering a rally in the most shorted-stocks such as Celltrion on Monday.

"(The FSC meeting attendees) agreed that the resumption of short-selling is inevitable given the local stock market's current situation and international status, and lifting of short-selling ban in other countries. But we agreed on inducing a soft landing by beginning with a partial lifting," the regulator said in a statement.

"The domestic stock market ranks 10th globally (by market capitalisation) and given that status, it is not appropriate to abolish short-selling ... Short-selling is allowed in most advanced stock markets, so South Korea will not be able to enter advanced markets should the short-selling be curbed," it added.

The trading restriction that has been in place since last March was aimed at curbing speculative trading amid the widening fallout from the coronavirus outbreak early last year.

From March's lows, the benchmark KOSPI surged as much as 127% earlier this year in its steepest rally in years as investors look towards a broad recovery in Asia's fourth-largest economy. (Reporting by Joori Roh Editing by Tom Hogue, Robert Birsel)