South Korean Stocks Drop Over 2% Post-Holiday as Chipmakers Slide on Bond Yield Worries
South Korean shares tumbled more than 2% during Monday trading, dragged down by heavy selling across major semiconductor heavyweights amid concerns over rising bond yields. The downturn came in the first trading session following an extended holiday, with investors closely watching upcoming export data and Micron Technology’s earnings reports this week for fresh signals on the sustainability of the artificial intelligence-driven chip boom.
The benchmark KOSPI index dropped 150.83 points, or 2.13%, to 6,930.09 by 01:22 GMT, snapping a four-session winning streak that had previously lifted the index to a two-month peak.
South Korean financial markets had been closed on Thursday and Friday for the Chuseok holiday, leaving Monday's session as investors' first opportunity to price in global market developments that unfolded during the long weekend.
Leading semiconductor manufacturers came under intense selling pressure. Industry titan Samsung Electronics dropped 3.94%, while its primary rival SK Hynix plunged 4.67%. Market data throughout the session showed both stocks extending losses past the 4% mark, fueled by sustained selloffs from foreign and institutional investors.
These declines unfold as market participants track the global semiconductor sector, weighing sustained long-term bets on AI-driven demand against immediate macro headwinds, including elevated financing costs and rising sovereign bond yields.
Bond Yields Under Scrutiny
South Korean government bond yields trended upward during the session. The yield on the benchmark, heavily traded 3-year treasury rose by 11.6 basis points to 4.114%, while the 10-year sovereign bond yield climbed 13 basis points to 4.539%.