Seoul stocks snap 2-day winning streak on increasing US Treasury yields

South Korean stocks snapped its two-day winning streak Thursday as investor sentiment weakened over concerns of increasing US Treasury yields. The Korean won fell against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) declined 39.5 points, or 1.28 percent, to close at 3,043.49 points.

Trading volume was moderate at about 1.3 billion shares worth some 16.8 trillion won ($14.9 billion), with losers outnumbering gainers 505 to 358.

Foreigners sold a net 928 billion won, while retail investors purchased a net 2.2 trillion won. Institutions offloaded a net 1.3 trillion won.

Foreign and institutional sell-offs increased as yields of the US benchmark 10-year Treasury approached the 1.5 percent threshold again.

The increase in bond yields is widely seen as a sign of an economic recovery and a precursor of inflation, which could reduce investors' rush for risky assets.

"The increase in US Treasury yields added (downward) pressure to the local stock market, leading to massive selling by foreign and institutional investors," said Kiwoom Securities analyst Seo Sang-young.

Steel and bank stocks fared well on speculation of a faster-than-expected recovery from the pandemic, while tech and auto heavyweights lost.

Top cap Samsung Electronics lost 1.9 percent to 82,400 won, and No. 2 chipmaker SK hynix shed 3.4 percent to 142,000 won.

Giant internet portal operator Naver fell 2 percent to 391,500 won, with its rival Kakao moving down 2.33 percent to 482,000 won.

Pharmaceutical giant Samsung Biologics decreased 1.71 percent to 748,000 won, but its rival Celltrion advanced 1.16 percent to 306,500 won.

Leading chemical firm LG Chem retreated 2 percent to 865,000 won, and top automaker Hyundai Motor went down 2.08 percent to 235,000 won.

The local currency closed at 1,125.1 won against the US dollar, down 4.8 won from the previous session's close. (Yonhap)