Seoul stocks decline for third straight day while Treasury yields rise

Shares retreated Wednesday as rising U.S. Treasury yields raised concerns over higher borrowing costs, dampening investor sentiment. The Korean won strengthened against the dollar.

The Kospi fell 32.77 points, or 0.48 percent, to end at 6,838.04, marking its third consecutive session of losses.

Overnight, U.S. stocks ended slightly lower despite a decline in oil prices, as persistently high Treasury yields kept investors cautious.

Global bond yields have risen to multiyear highs amid concerns that elevated energy prices could keep inflationary pressures high and lead to further interest rate hikes.

The yield on the 30-year U.S. Treasurys topped 5.6 percent, its highest level in 24 years, while the benchmark 10-year yield remained above 5.2 percent, its highest level since 2007.

Trade volume was light at 264.24 million shares worth 18.81 trillion won ($13.9 billion), with decliners outnumbering advancers 511 to 351.

Foreigners and institutions sold a net 2.05 trillion won and 767.97 billion won, respectively, while individuals bought a net 1.17 trillion won.

“While the market has largely anticipated further increases in the 10-year U.S. Treasury yield, the faster-than-expected pace of the rise has continued to weigh on stocks,” Han Ji-young, an analyst at Kiwoom Securities, said.

Market heavyweights were mixed.

Samsung Electronics fell 1.47 percent to 268,500 won, while chipmaker SK hynix edged up 0.62 percent to 1.78 million won.

Financial shares were in negative territory.

KB Financial Group sank 2.71 percent to 168,800 won, while Shinhan Financial Group fell 3.98 percent to 106,100 won.

The local currency strengthened 3.9 won from the previous session to trade at 1,352.8 won against the greenback at 3:30 p.m. 

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys fell 6.5 basis points to 4.011, and the return on the benchmark five-year government bonds shed 7.3 basis points to 4.203.

Yonhap