Seoul stocks plunge at open as Wall Street tech sell-off and rising yields weigh
Key Takeaways
- •The KOSPI opened 4.96 percent lower and was down 6.61 percent to 6,416.06 at 9:15 a.m.
- •The Korea Exchange activated a sell-side sidecar, temporarily halting program trading in KOSPI-listed shares for five minutes.
- •Wall Street closed lower overnight as stalled U.S.-Iran peace efforts pushed oil prices higher and lifted bond yields.
- •Samsung Electronics fell 7.64 percent and SK hynix dropped 9.63 percent, dragging the broader Seoul market lower.
- •Hanwha Aerospace rose 3.66 percent after reports that its U.S. unit won a contract to supply K9 howitzer prototypes to the U.S. Army.
Seoul shares opened sharply lower Wednesday, tracking overnight losses on Wall Street, as rising bond yields and oil prices pressured technology stocks and dampened investor sentiment.
The benchmark Korea Composite Stock Price Index opened 4.96 percent lower and had lost 453.77 points, or 6.61 percent, to 6,416.06 as of 9:15 a.m.
Shortly after the opening bell, the Korea Exchange activated a sell-side sidecar, suspending program trading in KOSPI-listed shares for five minutes. A sell-side sidecar is triggered when the KOSPI 200 Futures Index falls 5 percent or more for at least one minute. The sidecar is one of the exchange's automated stabilizers, and steeper declines can set off market-wide circuit breakers that halt trading altogether.
Overnight, Wall Street's major indexes closed lower as stalled peace efforts between the United States and Iran weighed on investor sentiment and pushed oil prices higher. The Dow Jones Industrial Average shed 0.22 percent, the benchmark S&P 500 lost 0.69 percent, and the tech-heavy Nasdaq Composite Index fell 1.33 percent.
The US 30-year Treasury yield rose to its highest level since 2007 amid concerns that elevated energy prices could keep inflation high.
In Seoul, technology stocks traded sharply lower. Market bellwether Samsung Electronics retreated 7.64 percent, while chipmaking rival SK hynix dipped 9.63 percent. The two chipmakers are among South Korea's biggest listed companies and carry heavy weight in the benchmark index, amplifying their effect on the broader market. Leading refiner SK Innovation fell 4.33 percent, and top automaker Hyundai Motor shed 6.09 percent.
Hanwha Aerospace bucked the decline, rising 3.66 percent following reports that its US unit had won a contract to deliver K9 self-propelled howitzer prototypes to the US Army. The K9 is the flagship export of South Korea's defense industry, which in recent years has won orders from buyers including Poland, Finland, India and Australia.
The Korean won was trading at 1,413.6 against the US dollar as of 9:15 a.m., down 0.04 won from the previous stock market session's close. (Yonhap)
