Global Market: South Korean stocks slide more than 3% as Iran conflict deepens global market selloff

South Korean shares fell sharply on Wednesday, with the Kospi dropping more than 3% as rising bond yields, higher oil prices and escalating tensions between the United States and Iran weighed on investor sentiment.

According to a report by Reuters, the benchmark Kospi was down 214.27 points, or 3.13%, at 6,621.53 as of 0158 GMT. Foreign investors were net sellers of South Korean shares worth 890.2 billion won ($649.8 million).

The decline followed another weak session on Wall Street, where U.S. stocks extended their losses as a global bond-market selloff intensified and crude oil prices climbed amid diminishing hopes of a near-term resolution to the conflict involving the U.S., Israel and Iran.


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According to the report, the United States launched a barrage of air strikes against Iran on Tuesday, followed by Iranian retaliation, marking the most serious escalation in several weeks. The conflict has pushed global energy prices higher and added to concerns over its impact on the broader economy.

The rise in bond yields added further pressure on equities, particularly interest-rate-sensitive sectors. The report also stated that South Korean markets have become more sensitive to macroeconomic factors such as oil prices and bond yields.

Among major Kospi constituents, Samsung Electronics fell 3.26%, while SK Hynix declined 3.72%. LG Energy Solution dropped 3.81%.

Automakers were also among the major decliners. Hyundai Motor fell 5.24%, while Kia Corp declined 5.26%. POSCO Holdings lost 2.93%, and Samsung BioLogics slipped 1.64%.

Market breadth was weak, with 731 of the 907 traded stocks declining, while only 150 advanced.

South Korea's consumer inflation accelerated in August from a year earlier, partly reflecting low-base effects, although the increase was smaller than economists had expected, according to data released on Wednesday.

The Korean won, however, strengthened against the U.S. dollar. It was quoted at 1,370.2 per dollar on the onshore settlement platform, up 0.35% from its previous close of 1,375.

In the bond market, September three-year Treasury futures fell 0.14 point to 102.99. The most liquid three-year Korean Treasury bond yield rose 2.9 basis points to 3.920%, while the benchmark 10-year yield climbed 5 basis points to 4.421%, the report stated.