Seoul Stocks Extend Losing Streak as US Treasury Yields Climb

South Korean stocks closed lower for a third straight session on Wednesday as rising US Treasury yields intensified concern about borrowing costs and global financial conditions. The Korean won also weakened against the dollar.

The benchmark Korea Composite Stock Price Index lost 32.77 points, or 0.48 percent, to finish at 6,838.04. Declining stocks outnumbered gainers by 511 to 351, while trading volume reached 264.24 million shares valued at 18.81 trillion won, or about $13.89 billion.

Foreign investors were the largest net sellers, unloading 2.05 trillion won in shares. Institutions sold a net 767.97 billion won, while individual investors purchased a net 1.17 trillion won. The imbalance showed overseas and institutional investors reducing exposure as bond-market pressure spread into equities.

The session combined a relatively modest fall in the headline index with broad weakness across individual shares. Light turnover and the wider number of decliners suggested caution was not confined to a single industry, even though the largest technology companies moved in different directions.

The immediate concern was the speed of the rise in US government borrowing costs. The 30-year US Treasury yield moved above 5.6 percent, its highest level in 24 years, while the benchmark 10-year yield stayed above 5.2 percent, a level not seen since 2007. Elevated energy prices have added to worries that inflation could remain persistent and prompt further interest-rate increases.

Han Ji-young, an analyst at Kiwoom Securities, said investors had largely expected the 10-year Treasury yield to rise further, but the faster-than-anticipated pace continued to weigh on stocks. US equities had also finished slightly lower overnight despite a decline in oil prices, as high yields kept risk appetite subdued.

Major Korean shares ended mixed. Samsung Electronics dropped 1.47 percent to 268,500 won, while SK hynix rose 0.62 percent to 1.78 million won. Financial stocks were among the notable decliners: KB Financial Group fell 2.71 percent to 168,800 won and Shinhan Financial Group slid 3.98 percent to 106,100 won.

The won was quoted at 1,352.8 per dollar at 3:30 p.m., 1.2 won weaker than at the close of the previous stock-trading session. The combination of equity outflows, rising overseas yields and a softer currency highlighted the sensitivity of Korean markets to shifts in US interest-rate expectations.