Korea's stock market slumped on the 19th under the impact of U.S. Government Bonds yields hitting a record high for the first time in 19 years. High rates increase corporations' funding expense and stock discount rates, adding pressure to the market. In particular, foreigners in the main board turned net sellers for the first time in five sessions, leading the decline.

On the morning of the 19th, the KOSPI shows 6,508.07, down 361.76 points (5.27%) from the previous session, on the status board of the dealing room at the Hana Bank headquarters in Jung-gu, Seoul./Courtesy of News1.

The KOSPI index closed at 6,471.17, down 398.66 (5.8%) from the previous session. The index opened at 6,500, down 300 points at the start, and triggered a sell-sidecar six minutes after the open. It then pared losses as it reclaimed the 6,600 level, but heavy selling pressure pushed it back below 6,500.

Foreigners and institutions sold heavily. They recorded net sales of 3.4883 trillion won and 1.3244 trillion won, respectively. Foreign investors turned net sellers after five sessions. Individuals alone bought a net 4.6368 trillion won to defend against the drop, but it was not enough.

SK hynix(000660) plunged 9%, and Samsung Electronics tumbled 7%. Most of the top market-cap stocks, led by tech names, fell. Only a few names, including Hanwha Aerospace(012450), which saw news of a U.S. wheeled K9 order, ended higher.

Soaring U.S. Government Bonds yields dampened risk appetite. According to the Wall Street Journal (WSJ) and other foreign media on the 18th (local time), the U.S. 30-year Government Bonds yield rose intraday to 5.33% annually. It is the highest level in 19 years since 2007.

Uncertainty related to the Middle East also remains. Iranian Parliament Speaker Mohammad Bagher Ghalibaf said the Strait of Hormuz would remain closed until the United States and Iran fulfill their promises under a provisional agreement.

Overnight, U.S. stocks closed lower across the board. The Dow Jones Industrial Average finished at 53,343.40, down 0.22% from the previous session. The Standard & Poor's (S&P) 500 fell 0.69% to 7,691.76, and the Nasdaq composite closed down 1.33% at 26,289.71.

Lee Kyung-min of Daishin Securities said, "U.S. Treasury yields stayed elevated and Middle East uncertainty persisted, acting as downward pressure on the market," and noted, "a pullback emerged, centered on the semiconductor sector, which had led the recent sharp rebound."

The KOSDAQ index closed at 824.46, down 9.74 (1.17%) from the previous session. Institutions dragged the index down with net sales of 71.6 billion won. Foreigners and institutions recorded net purchases of 14.8 billion won and 49.9 billion won, respectively.

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