South Korea’s benchmark KOSPI fell 2.86% to 6,640.26 on Wednesday after opening more than 3% lower, as a renewed surge in oil prices and global bond yields hit technology and industrial heavyweights. Samsung Electronics dropped 2.97% and SK Hynix lost 3.13%, while Hyundai Mobis, HD Hyundai Heavy Industries and Hanwha Aerospace also declined sharply.
The selloff followed a risk-off session on Wall Street and came as Brent crude approached $96 a barrel after renewed US strikes on Iran raised fears over the Strait of Hormuz. US crude also moved above $90. For import-dependent South Korea, higher oil threatens corporate costs, household inflation and the trade balance, while rising global yields pressure growth stocks. The US 10-year Treasury yield reached about 4.81%, close to a three-year high.
Foreign and institutional investors returned as sellers, offloading a net 56.6 billion won and 10.2 billion won respectively, while retail investors bought the dip. Kiwoom Securities researcher Han Ji-young said Korean equities have become unusually sensitive to oil prices and long-term yields, with investors watching US-Iran tensions and bond markets in the US and Japan. The regional selloff also hit Japan’s Nikkei 225, which fell about 2.2%, with SoftBank, Advantest and Tokyo Electron all down more than 4%.
Analysts noted that Samsung and SK Hynix buyback programmes could cushion trading conditions into the third-quarter earnings season, but buybacks alone cannot indefinitely offset broad investor selling.
