Kospi tumbles 5.8% below 6,500 as U.S. Treasury yields surge
The main bourse tanked 5.8 percent, or 398.66 points, to close at 6,471,17 as chips shares lost after data center construction took a hit in the United States.
A screen in Hana Bank's trading room in central Seoul shows the Kospi and Kosdaq figures on Aug. 19.YONHAP
Shares tumbled nearly 6 percent on Wednesday as surging U.S. Treasury yields rattled investor sentiment and dragged the Kospi below the 6,500 mark.
The Kospi fell 5.8 percent, or 398.66 points, to close at 6,471.17 on Wednesday, according to the Korea Exchange. Losses had widened to more than 6 percent in early trading, and shortly after the opening, the bourse operator activated a sell-side sidecar on the Kospi, which temporarily halted program trading for Kospi-listed shares.
Semiconductor shares were among the biggest losers. Samsung Electronics dropped 7.82 percent to 247,500 won, and SK hynix plunged 9.75 percent to 1.5 million won but recovered to 1.6 million won in after-hours trading after announcing plans to cancel 40 trillion won worth of treasury shares.
Foreign investors sold a net 3.5 trillion won ($2 billion) worth of shares on the main Kospi market, while institutions offloaded a net 1.3 trillion won. Individuals purchased a net 4.6 trillion won but failed to offset the heavy selling.
A sharp rise in U.S. Treasury yields weighed heavily on the market. The yield on the 30-year Treasury climbed as high as 5.34 percent during trading, its highest level since 2007, while the 10-year yield rose above 4.7 percent.
“With inflation concerns lingering amid uncertainty over U.S.-Iran negotiations, the stock market was weighed down by rising long-term yields in advanced economies,” said Han Ji-young, an analyst at Kiwoom Securities.
Worries around the AI and semiconductor sectors compounded the pressure on sentiment.
From left: Samsung Electronics' flag; SK hynix's headquarters in Icheon, GyeonggiYONHAP
“Before Asian markets opened, Pennsylvania’s governor signed an executive order requiring environmental and community approval for data center construction,” said Seo Sang-young, an analyst at Mirae Asset Securities. “That triggered selling across the AI semiconductor value chain in major markets including Korea, Japan and Taiwan.”
The Kosdaq fell 1.17 percent, or 9.74 points, to close at 824.46. Alteogen, the Kosdaq’s largest listed company by market capitalization, rose 1.85 percent, helping limit the index’s losses.
BY JANG SEO-YUN [kim.hayoon1@joongang.co.kr]
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
