South Korea's benchmark KOSPI fell below the 7,000 mark in the first trading session after the Chuseok holiday, weighed down by sustained high oil prices from the prolonged Middle East conflict and rising global interest rates that have dampened investor sentiment.
As of 10:03 a.m. on the 28th, the KOSPI was trading at 6,983.87, down 1.37% from the previous session, according to the Korea Exchange. The index opened at 7,057.86, down 23.06 points or 0.33%, but losses deepened as selling pressure intensified. Foreign investors sold a net 564.2 billion won and institutions a net 50.5 billion won, while retail investors bought a net 325.9 billion won.
Samsung Electronics (005930.KS) and SK hynix (000660.KS), the two heavyweights that drive the local market, both declined. Samsung Electronics changed hands at 276,250 won, down 3.24%, while SK hynix traded at 1,794,000 won, down 3.65%. In contrast, other large-cap stocks edged higher, including LG Energy Solution (373220.KS) at 4.41%, Hyundai Motor (005380.KS) at 0.99%, Samsung Biologics (207940.KS) at 1.83% and KB Financial Group (105560.KS) at 0.58%. The weakened sentiment appears confined largely to major semiconductor names.
Investor sentiment has broadly deteriorated as concerns mount that high oil and consumer prices will become entrenched amid the continuing U.S.-Iran conflict, and after the U.S. Federal Reserve raised its benchmark interest rate for the first time in three years and two months. The U.S. 10-year Treasury yield broke above the 5% level 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- surged to 4.89% on the 21st from 3.79% at the start of the year.
U.S. stock markets wavered during the Chuseok holiday on a spike in international oil prices before recovering some of their losses. The Dow Jones Industrial Average fell 0.07%, the Standard & Poor's 500 lost 0.27% and the Nasdaq dropped 0.64%. The declines narrowed after Iran said it had proposed a "seven-day plan" to the United States calling for an end to hostilities and the reopening of the Strait of Hormuz. Analysts said the domestic market also retains room for a rebound as external uncertainty eases.
