KOSPI slips as US bond yields, oil prices weigh on investor sentiment
A stock ticker at Hana Bank's headquarters in Seoul shows the benchmark KOSPI closing at 6,870.81, down 0.27 percent from the previous close, Tuesday. Yonhap
Seoul stocks fell Tuesday as rising U.S. Treasury yields and oil prices weighed on investor sentiment, with the benchmark KOSPI opening lower and remaining in negative territory for most of the session.
The index opened at 6,844.41, down 0.66 percent from the previous close, according to the Korea Exchange. It moved in a narrow range below the flat line before closing at 6,870.81, down 0.27 percent.
Retail investors and institutions were net buyers of 1.14 trillion won ($842 million) and 121.1 billion won, respectively, while foreign investors sold a net 2.9 trillion won.
Oil prices rose and U.S. Treasury yields remained elevated amid the escalating standoff between Washington and Tehran.
Over the weekend, U.S. President Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz and resume nuclear talks in exchange for the lifting of a U.S. naval blockade, among other concessions.
The yield on the 10-year Treasury note, a global benchmark for borrowing costs, remained above 5.2 percent, its highest level since mid-2007.
Higher yields and oil prices weighed on Wall Street overnight, with all three major U.S. stock indexes ending lower. Several major technology and semiconductor stocks, including Qualcomm, Intel, Micron and SanDisk, also fell amid renewed concerns over risks surrounding artificial intelligence, adding to the pressure on Korean chip stocks.
Shares of the two semiconductor heavyweights, which had plunged more than 5 percent in the previous session, attempted a recovery. Samsung Electronics closed at 272,500 won, up 0.93 percent.
SK hynix, however, fell 0.17 percent to 1.76 million won amid lingering concerns that a separate listing of its U.S. subsidiary Solidigm could dilute the value attributed to the parent company. Reports that the chipmaker's NAND flash and solid-state drive subsidiary is preparing for an initial public offering next year have raised concerns among investors over a potential “double listing.”
The secondary bourse Kosdaq initially followed the broader market, opening 0.32 percent lower at 843.87 and remaining in negative territory for most of the session. It reversed course late in the day, however, closing at 849.80, up 0.38 percent.
At Tuesday's event during Korea Premium Week, the Korea Exchange said it plans to introduce a new tiered system for the Kosdaq market next year, dividing listed companies into “premium” and “standard” segments as part of efforts to strengthen the market.
The release of detailed plans, however, was postponed yet again, despite having been expected alongside the announcement.
In the Seoul foreign exchange market, the won strengthened 8.4 won against the U.S. dollar to close at 1,356.7 won.