Kospi Slumps on Rising US Treasury Yields and Oil Prices

Kospi is showing early weakness on Monday as risk asset sentiment dampens due to sharp increases in US Treasury yields and international oil prices.

As of 9:07 a.m., Kospi stood at 6,632.53, down 5.27 points (0.08%) from the previous trading day. Foreign investors and institutions sold shares worth 20.5 billion won and 2.44 billion won respectively, dragging down the index while retail investors bought 19.28 billion won.

Overnight New York markets declined for a second consecutive day, with Dow Jones Industrial Average closing down 0.63% at 52,093.11, S&P 500 dropping 0.45% to 7,585.73, and Nasdaq Composite falling 0.78% to 25,981.57.

Market volatility increased ahead of the Federal Reserve's FOMC meeting, with US 10-year Treasury yields rising to a 16-year high of 5.041% during trading before settling at 4.995% by 3 p.m. The 2-year yield rose to 4.661%, while the 30-year yield reached 5.362%.

International oil prices surged amid Middle East supply concerns, with Saudi Arabia's Eastern and Western pipelines closed following Houthi attacks and oil shipments halted at Red Sea Yanbu terminal. Libya shut down three oil fields.

Brent crude for November delivery rose 2.90% to $108.75 per barrel, while West Texas Intermediate (WTI) October futures jumped 4.38% to $105.83 per barrel — both reaching their highest levels since May 19.

Among top market capitalization stocks, semiconductor companies saw modest gains: Samsung Electronics rose 0.10% to 248,750 won, SK Hynix advanced 0.71% to 1,702,000 won, while LG Energy Solution and KB Financial gained 2.05% and 0.23% respectively.

Conversely, Hyundai Motor fell 0.82%, Samsung Biologics dropped 0.57%, Samsung Life Insurance declined 0.53%, SK Square slipped 0.40%, and Samsung C&T decreased 0.29%.

Kosdaq also declined, falling 6.31 points (0.78%) to 806.10. Foreign investors and institutions sold shares worth 48.6 billion won and 3.8 billion won respectively, while retail investors bought 52.7 billion won.

Alteogen and RoboTiz dropped 2.31%, with Sintek (-1.91%), Wonik IPS (-1.85%), Reno Industry (-1.56%), Rainbow Robotics (-1.27%), and Eotech (-1.12%) also declining, while EcoPro rose 0.24%.

Investors are closely watching the FOMC rate decision, with CME FedWatch indicating a 94.5% probability of a 0.25 percentage point interest rate hike in September.