Seoul:South Korean shares dropped by more than 2 percent on Monday, breaking their four-day winning streak as investors took profits from large-cap tech stocks. The benchmark Korea Composite Stock Price Index (KOSPI) fell 191.18 points, or 2.7 percent, to close at 6,889.74.
According to Yonhap News Agency, the index opened 0.33 percent lower and experienced a heavy selling spree by foreigners and institutions. The KOSPI had maintained a winning streak through Wednesday before closing for the Chuseok holiday, South Korea's version of Thanksgiving.
Investors are currently weighing several factors, including rising bond yields and uncertain prospects in the Middle East. In contrast, U.S. stocks ended higher on Friday, with the Dow Jones Industrial Average increasing by 0.93 percent, the S&P 500 gaining 0.51 percent, and the Nasdaq Composite Index advancing 0.48 percent.
Lee Kyung-min, an analyst at Daishin Securities, noted that while there were signs of easing in U.S.-China and U.S.-Iran relations, a sharp rise in U.S. Treasury yields dampened risk appetite, offsetting these positive developments. The trading volume was light at 216.2 million shares worth 21.8 trillion won (US$15.9 billion), with 608 stocks rising and 249 falling. Foreigners and institutions sold a net 3.2 trillion won and 1 trillion won, respectively, while individuals purchased 2.6 trillion won.
Tech shares suffered losses, with Samsung Electronics dropping 5.43 percent to 270,000 won, and its competitor SK hynix falling 5.05 percent to 1.77 million won, despite opening higher. SK Square, the parent of SK hynix, also declined by 7.56 percent to 1.1 million won. The Korean won was quoted at 1,365.1 won per U.S. dollar at 3:30 p.m., down 7.6 won from the previous session's close.
Bond prices fell, moving inversely to yields, as the yield on three-year Treasurys rose by 11.3 basis points to 4.119, and the return on five-year government bonds increased by 12.5 basis points to 4.345.