The KOSPI index plunged close to 4% as Government Bonds yields in major countries and global oil prices surged together. Samsung Electronics and SK hynix moved to buy back their own shares, but it was not enough to stop the market slide. As risk-off sentiment spread on rising global bond yields, the KOSPI fell below the 6,600 level, and the KOSDAQ index also dropped more than 2%.
On the 2nd, the KOSPI index closed at 6,562.72, down 3.99% (273.08 points) from the previous trading day. In the main board, selling by foreigners and institutions pulled the index down. While individuals were net buyers of 3.1236 trillion won, foreigners and institutions were net sellers of 2.448 trillion won and 2.3555 trillion won, respectively.
A sharp rise in global oil prices and higher Government Bonds yields in major countries spurred investors' risk aversion. Overnight, the United States carried out additional airstrikes against Iran, escalating military clashes between the two, and global oil prices jumped sharply as a result. October-delivery West Texas Intermediate (WTI) futures topped $90 per barrel, and November-delivery Brent futures also surged to the $95 level.
The spike in oil prices rekindled inflation fears, leading to a parallel rise in Government Bonds yields in major countries. The U.S. 10-year Treasury yield jumped intraday to 4.788%, and even Japan's Government Bonds yield topped 3%, rapidly chilling sentiment across the market.
Lee Kyung-min, a researcher at Daishin Securities, said, "Even amid recent external uncertainties, buying by other corporations centered on Samsung Electronics and SK hynix had supported the lower end of the index," and added, "That flow continued today, but it was not enough to offset selling by foreigners and institutions as macro pressures grew."
Large caps such as semiconductor stocks were weak. Samsung Electronics and SK hynix ended down in the 4% range. Most of the top market-cap stocks on the main board also finished lower. Kang Jin-hyeok, a researcher at Shinhan Investment & Securities, said, "With foreigners selling both cash and futures, large caps including semiconductor names were broadly weak."
Meanwhile, the KOSDAQ index barely held the 800 level. The KOSDAQ index closed at 803.98, down 2.10% (17.27 points) from the previous day. The KOSDAQ index slipped below 800 in early trading but pared losses, led by materials, parts and equipment, and biotech stocks, to climb back above 800.
In the KOSDAQ market, individuals and foreigners were net buyers of 171.9 billion won and 83.1 billion won, respectively, while institutions alone sold a net 251.7 billion won.
Kang said, "Despite macro headwinds, it was not an overall risk-off," adding, "If anything, with both foreigners and individuals net buying, the decline was limited."