South Korean shares fell more than 2% on Monday, with major chipmakers leading losses as higher bond yields weighed on risk appetite in catch-up trading after a two-day holiday break, Reuters reported.
The benchmark KOSPI fell 150.83 points, or 2.13%, to 6,930.09 by 0122 GMT, snapping a four-session winning streak that had taken the index to a two-month high.
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South Korean financial markets were closed on Thursday and Friday for the Chuseok holidays, leaving investors to react to moves in global markets during the break.
Chip stocks came under pressure as investors assessed the impact of elevated borrowing costs on technology valuations. Samsung Electronics fell 3.94%, while SK Hynix dropped 4.67%.
Reuters reported that investors are also awaiting South Korea's export data and earnings from U.S. chipmaker Micron Technology later this week for fresh indications on the strength and sustainability of the artificial intelligence-driven semiconductor boom.
Wall Street ended higher on Friday, supported by Microsoft and other AI-related technology stocks. However, elevated oil prices and a recent rise in U.S. Treasury yields continued to keep investors cautious.
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The Bank of Korea said on Monday that it would closely monitor financial and foreign exchange markets amid heightened market volatility.
Outside the semiconductor sector, battery maker LG Energy Solution gained 3.20%. Hyundai Motor and Kia rose 0.42% and 0.78%, respectively. POSCO Holdings advanced 1.28%, while Samsung BioLogics added 1.39%.
Foreign investors were net sellers of South Korean shares worth 811.3 billion won ($597.09 million), adding to the pressure on the benchmark.
The South Korean won was unchanged at 1,357.0 per dollar on the onshore settlement platform.
Bond markets also reflected rising yield pressures. December futures on three-year Korean Treasury bonds fell 0.37 point to 102.05. The yield on the most liquid three-year Korean Treasury bond rose 11.6 basis points to 4.114%, while the benchmark 10-year yield climbed 13 basis points to 4.539%, Reuters reported.
The rise in domestic bond yields comes as global investors continue to assess the outlook for interest rates and inflation, with higher yields potentially increasing the cost of capital for growth-oriented technology companies.
Of the 912 stocks traded, 630 advanced and 245 declined.
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