Samsung Electronics and SK hynix fell more than 4% on the first trading day after the Chuseok holiday, dragging down the benchmark KOSPI index. A surge in long-term U.S. Treasury yields and elevated international oil prices, both of which built up during the holiday, weighed on the market.
Samsung Electronics traded at 273,500 won as of 1:42 p.m. on the 28th, down 4.20% from the previous session, according to the Korea Exchange. SK hynix changed hands at 1.785 million won, down 4.14%. With the market's two largest stocks falling together, the KOSPI stood at 6,923.57, down 157.35 points, or 2.22%. The index opened at 7,057.86, down 23.06 points or 0.33%, but losses widened as selling pressure intensified. Foreign investors sold a net 2.3027 trillion won and institutions sold a net 1.003 trillion won, while individual investors bought a net 1.9854 trillion won.
Analysts said negative developments that emerged during the holiday were being priced in Monday, on top of accumulated headwinds including high interest rates, high oil prices and the continuing Middle East conflict. During the holiday, the yield on the 30-year U.S. Treasury note climbed to 5.519%, its highest since June 14, 2004, while oil prices rose for two straight days amid escalating tensions between the United States and Iran, approaching $100 a barrel again. In SK hynix's case, some analysts said successive reports that Solidigm, a subsidiary of its subsidiary, would pursue an initial public offering in the United States were adding downward pressure.
"With uncertainties piling up, including the view that artificial intelligence investment has peaked and the continuing Middle East conflict, some investors appear to be unloading large-cap stocks," an official in the securities industry said. "The appeal of investing in equities is declining as government bond yields surge."
Investor sentiment at home and abroad has broadly deteriorated as the prolonged conflict between the United States and Iran fuels concerns that high oil prices and high inflation will become entrenched, and as the U.S. Federal Reserve raised its benchmark interest rate for the first time in three years and two months. The yield on the 10-year U.S. Treasury note broke above 5% on the 14th of this month for the first time in about three years, while in South Korea the yield on five-year unsecured corporate bonds rated AA- jumped to 4.89% on the 21st from 3.79% at the start of the year.
