The KOSPI index dropped more than 1% during trading, falling below the 6,900 mark. This decline comes as U.S. long-term government bond yields surged to their highest level in 24 years, with foreign investors selling over 1 trillion won, contributing to the index's downturn. In contrast, the KOSDAQ index rose over 2%, buoyed by foreign and institutional buying despite individual selling.
According to the Korea Exchange, as of 1:20 PM, the KOSPI was down 75.18 points (1.07%) at 6,928.56. The index briefly surpassed the 7,040 mark early in the session but later surrendered those gains and widened its losses.
In the main stock market, foreign investors led the decline with a net sell of 1.1944 trillion won, while institutions also sold off 81.2 billion won. Conversely, individual investors purchased a net 470.5 billion won.
Most large-cap stocks were under pressure. Samsung Electronics traded at 271,000 won, down 1.81%, while SK Hynix fell 3.26% to 1,781,000 won. Other notable declines included Samsung Biologics (-3.91%), KB Financial (-0.18%), and Samsung Life (-1.56%).
On the other hand, Samsung Electro-Mechanics rose 5.44% to 1,667,000 won, and LG Energy Solution increased by 5.39% to 391,000 won, while Hyundai Motor gained 0.22%.
The KOSDAQ index, in contrast to the KOSPI, continued its upward trend. At the same time, the KOSDAQ index was up 23.01 points (2.58%) at 916.30.
In the KOSDAQ market, foreign and institutional investors bought a net 125.6 billion won and 52.9 billion won, respectively, while individuals sold off 175.7 billion won. The number of rising stocks outnumbered declining ones, with 929 stocks advancing compared to 721 that fell.
The upward trend was particularly evident among large-cap stocks. JUSUNG Engineering surged 16.03% to 275,000 won, and HLB rose 16.69% to 47,200 won. Other significant gainers included EcoPro BM (10.37%), EcoPro (7.76%), and Simtech (7.00%). Rainbow Robotics (3.34%), Rino Industry (2.73%), Wonik IPS (2.17%), and EoTechnics (1.88%) also showed strong performance, while Alteogen fell 0.19%.
Today, the domestic stock market is feeling the pressure from the sharp rise in U.S. long-term government bond yields. The yield on the U.S. 10-year Treasury note reached 5.35%, and the 30-year note hit 5.70%, marking the highest levels since 2002. The 10-year and 30-year yields closed at 5.31% and 5.66%, respectively.
Despite the disappointing U.S. employment figures for September reducing concerns about further interest rate hikes by the Federal Reserve, analysts suggest that worries over fiscal deficits, large-scale bond issuance, and long-term inflation are driving up market interest rates. The U.S. non-farm payrolls increased by only 29,000 jobs in September, significantly below the market expectation of 89,000, while the unemployment rate rose to 4.2%, exceeding the forecast of 4.1%.
Lee Kyung-min, a researcher at Daishin Securities, noted that while the employment shortfall in the U.S. has eased concerns about further tightening by the Fed, the upward trend in long-term rates persists. The probability of a rate hike in October dropped significantly from 70.9% a week ago to 23.8%, yet the pressures from the U.S. fiscal deficit, bond issuance, and long-term inflation concerns continue to exert upward pressure on long-term bond yields.
Lee also pointed out that fiscal instability in major countries, including France, is contributing to volatility in the bond market. The yield on France's 10-year government bonds has approached 5%, reaching its highest level since 2002, amid concerns over fiscal health and the exit of Japanese capital from French bonds, which is increasing global long-term yield pressures.
* This article has been translated by AI.
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