SEOUL, August 19 (AJP) - South Korean stocks plunged on Wednesday, triggering a sell-side trading curb as surging global bond yields battered chip shares.
The Korea Exchange activated a sell-side sidecar at 9:06 a.m. after KOSPI 200 futures fell 6.02 percent from the previous session's reference price. The benchmark KOSPI was down 6.74 percent at 6,407.14 at the time.
The sidecar temporarily halts program sell orders for five minutes when KOSPI 200 futures fall at least 5 percent and remain at that level for one minute.
Samsung Electronics and SK hynix led the retreat. As of around 9:30 a.m., Samsung Electronics was down 7.45 percent at 248,500 won, while SK hynix sank 9.09 percent to 1.51 million won.
The selloff spread to other large-cap stocks. Hyundai Motor dropped 6.09 percent to 408,500 won, while Samsung Electro-Mechanics fell 4.38 percent to 1.377 million won.
The losses followed a sharp retreat in U.S. technology stocks overnight as rising oil prices and a global bond selloff pushed long-term borrowing costs higher. The Philadelphia Semiconductor Index tumbled 5 percent, while Micron Technology fell 7 percent and Nvidia lost 2.3 percent. The Nasdaq Composite closed 1.33 percent lower.
The yield on the 30-year U.S. Treasury touched 5.33 percent, its highest level since 2007, while the benchmark 10-year yield climbed to around 4.74 percent. Concerns over inflation, fiscal spending and heavy debt issuance have added pressure to global bond markets.
Borrowing by major technology companies to finance artificial intelligence infrastructure has also added to bond supply. Investors have pointed to competition for capital from AI hyperscalers as one factor keeping long-term Treasury yields elevated.
Bond-market pressure has also intensified in Japan. The benchmark 10-year Japanese government bond yield touched 2.945 percent Tuesday, its highest level since September 1996, amid inflation concerns and expectations for further Bank of Japan tightening.
Japanese equities followed Wall Street and Seoul lower Wednesday, with the Nikkei 225 down about 2.9 percent at 65,566.52.
The won traded around 1,410 per dollar, up 0.25 percent against the U.S. currency.
AJP Takeaways
· The KOSPI fell 6.74% shortly after Wednesday's open, triggering a sell-side sidecar at 9:06 a.m.
· Samsung Electronics dropped 7.45% and SK hynix sank 9.09% as of 9:25 a.m.
· The rout followed a 5% plunge in U.S. semiconductor shares as long-term Treasury yields surged.
· Japan joined the regional selloff, with the Nikkei 225 down about 2.9% in early trading.
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