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KOSPI falls as US 10-year yield tops 5%, oil prices rise

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Summary

Korean stocks fell Tuesday as rising U.S. Treasury yields and crude oil prices outweighed bargain-hunting in semiconductor shares. The benchmark KOSPI closed at 6,627.26, down 0.85 percent, after turning lower in the afternoon. Foreign and institutional investors extended selling, while retail investors bought shares. The Kosdaq also fell, and the won weakened against the dollar.

Key Facts

  • The KOSPI touched an intraday low of 6,620.20 after turning lower after 2 p.m.
  • The U.S. 10-year Treasury yield hit 5.02 percent, and Brent crude rose from $105.68 to $107.35 a barrel.
  • Foreign investors sold a net 1.57 trillion won worth of shares, while institutional investors sold 904.4 billion won and retail investors bought 832.4 billion won.
  • The Kosdaq closed at 812.41, down 0.7 percent.
  • The won-dollar exchange rate closed at 1,359.4 won per dollar, up 12.1 won from the previous session.
By Lee Yeon-woo
  • Published KST
KOSPI and Kosdaq are displayed in the dealing room of Hana Bank in Seoul, Tuesday. The benchmark KOSPI closed at 6,627.26, down 0.85 percent from the previous session, while the secondary Kosdaq closed at 812.41, down 0.7 percent. Newsis

KOSPI and Kosdaq are displayed in the dealing room of Hana Bank in Seoul, Tuesday. The benchmark KOSPI closed at 6,627.26, down 0.85 percent from the previous session, while the secondary Kosdaq closed at 812.41, down 0.7 percent. Newsis

Korean stocks closed lower Tuesday as renewed concerns over rising U.S. Treasury yields and crude oil prices outweighed bargain-hunting in semiconductor shares, while foreign investors extended their selling streak to a fifth session.

The benchmark KOSPI closed at 6,627.26, down 0.85 percent from the previous session. After plunging 3.26 percent the previous day, the index rebounded as semiconductor stocks attracted bargain-hunting. However, the index turned lower after 2 p.m. and hit an intraday low of 6,620.20.

The reversal was triggered by a renewed deterioration in the macroeconomic backdrop. The U.S. 10-year Treasury yield hit 5.02 percent, while Brent crude extended its gains from $105.68 to $107.35 a barrel.

Foreign and institutional investors sold a net 1.57 trillion won ($1.15 billion) and 904.4 billion won worth of shares, respectively. Retail investors bought a net 832.4 billion won worth of shares.

SK hynix fell 0.41 percent to close at 1,690,000 won, while Samsung Electronics lost 0.2 percent to finish at 248,500 won.

Sector performance was mixed, with large-cap stocks coming under increased selling pressure.

Shipbuilding stocks weakened, giving back the previous session's gains. Samsung Heavy Industries, HD Korea Shipbuilding & Offshore Engineering and HD Hyundai Heavy Industries declined 6.33 percent, 6.74 percent and 5.32 percent, respectively.

Defense stocks also came under pressure as investors took profits. Hanwha Aerospace and Hanwha Systems declined 6.51 percent and 7.07 percent, respectively.

In contrast, battery stocks advanced as momentum tied to U.S. measures targeting China remained intact. Samsung SDI and LG Energy Solution gained 2.82 percent and 3.98 percent, respectively.

The Kosdaq fell 0.7 percent to close at 812.41.

The won-dollar exchange rate closed at 1,359.4 won per dollar, up 12.1 won from the previous session.

Meanwhile, BlackRock on Monday revised its outlook on Korean equities back to overweight from neutral, saying, "Korean equities subsequently experienced losses, and summer deleveraging has since eased those leverage concerns, supporting our return to overweight."

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