Shares of Samsung Electronics (005930.KS) and SK hynix (000660.KS) are plunging 7% and 9%, respectively. Investor sentiment toward risk assets has deteriorated after the yield on the 30-year U.S. Treasury bond hit its highest level in 19 years, prompting profit-taking centered on semiconductor stocks. With top market-cap names falling across the board, the KOSPI is down more than 6%.
Samsung Electronics traded at 249,000 won, down 19,500 won, or 7.26%, from the previous session, while SK hynix stood at 1,508,000 won, down 154,000 won, or 9.27%, the Korea Exchange said on the 19th. Other stocks also declined broadly, including SK Square (402340.KS) at -11.81%, Samsung Electro-Mechanics (009150.KS) at -4.51%, Hyundai Motor (005380.KS) at -5.98% and LG Energy Solution (373220.KS) at -2.14%.
As top KOSPI market-cap stocks fell in unison, the index dropped more than 6%. It opened at 6,528.77, down 341.06 points, or 4.96%, and fell as low as 6,400.81 during the session.
KOSPI index futures also tumbled, triggering a sell-side sidecar. A KOSPI sell-side sidecar is activated when the KOSPI 200 futures price stays down more than 5% from the previous session for one minute. The market-stabilization mechanism suspends the effect of program sell orders for five minutes. It was the 48th sidecar in the KOSPI market this year and the 25th on the sell side.
Both foreign and institutional investors were net sellers on the main board. Foreign investors sold a net 1.068 trillion won ($790 million) early in the session, while institutional selling reached about 227.1 billion won ($168 million). Meanwhile, retail investors alone bought a net 1.2645 trillion won ($935 million).
Tensions in the Middle East and a surge in bond yields have weighed on investor sentiment, dragging the index down. After the extension of a ceasefire between the United States and Iran fell through, higher oil prices brought inflationary pressure into focus. The market saw selling in U.S. Treasurys, pushing yields sharply higher. The yield on the 30-year U.S. Treasury bond climbed to as high as 5.33% during the session, its highest level in 19 years, since 2007. The surge in bond yields sharply curbed appetite for risk assets, which analysts read as the reason for the market's weakness.
