KOSPI falls on higher oil prices, global bond yields
The KOSPI and Kosdaq indexes are displayed in the dealing room of Hana Bank in Seoul, Friday. The benchmark KOSPI closed at 6,909.91, down 1.76 percent from the previous session. Yonhap
The KOSPI edged lower Friday amid rising oil prices as renewed geopolitical tensions in the Middle East fueled concerns over inflation.
The benchmark index opened 3.29 percent lower at 6,802.50 and pared some of its losses in afternoon trading before closing at 6,909.91, down 1.76 percent from the previous session.
Foreign investors sold a net 2.29 trillion won ($1.70 billion) worth of shares, while institutional investors sold a net 1.22 trillion won. Retail investors were the net buyers, purchasing 1.87 trillion won worth of shares.
Market bellwethers also fell. SK hynix fell 2.21 percent to close at 1.812 million won, while Samsung Electronics lost 3.35 percent to finish at 259,500 won.
With little prospect of negotiations between Iran and the United States resuming in the near term, international oil prices continued to rise. West Texas Intermediate and Brent crude futures climbed above $100 per barrel, adding to concerns over inflation.
Concerns over inflation were also heightened after the U.S. producer price index rose 5.4 percent in August from a year earlier, Thursday (local time), slightly above market expectations of 5.3 percent.
U.S. Treasury yields rose as investors remained concerned about inflation and U.S. fiscal policy. The 10-year Treasury yield rose 12 basis points to 4.96 percent, nearing the psychologically important 5 percent level, putting further pressure on stocks.
"The local stock market remained weak as international oil prices and U.S. Treasury yields surged. Investor caution also grew ahead of the release of the U.S. consumer price index, weakening demand for riskier assets," said Lee Kyoung-min, a researcher at Daishin Securities.
Investors are now turning their attention to the U.S. consumer price index for August, due Friday (local time), as the data could provide further clues about the Federal Reserve's monetary policy.
The secondary bourse Kosdaq, meanwhile, fell 1.95 percent to close at 820.64, down 16.28 points from the previous session.
The won-dollar exchange rate closed at 1,345.9 won per dollar, up 6.7 won from the previous session.