Kospi Opens Lower as Treasury Yields, Oil Jump; Foreigners and Institutions Sell

South Korea’s Kospi traded lower early on Sept. 16 as a jump in U.S. Treasury yields and global oil prices curbed appetite for risk assets.

As of 9:07 a.m., the Kospi was down 5.27 points, or 0.08%, at 6,632.53. On the main bourse, foreign investors were net sellers of 205 billion won and institutions sold a net 24.4 billion won, dragging on the index. Retail investors were net buyers of 192.8 billion won.

Overnight declines on Wall Street for a second straight session also weighed on South Korean stocks. On Sept. 15, the Dow Jones Industrial Average fell 0.63% to 52,093.11. The S&P 500 dropped 0.45% to 7,585.73, while the Nasdaq Composite lost 0.78% to 25,981.57.

Bond-market volatility also intensified ahead of the Federal Reserve’s Federal Open Market Committee meeting. The yield on the 10-year U.S. Treasury climbed as high as 5.041% intraday, the highest level since July 2007. It later gave up some gains and stood at 4.995% as of 3 p.m. The two-year yield rose to 4.661%, while the 30-year yield advanced to 5.362%.

Global oil prices also surged as supply concerns in the Middle East deepened. Saudi Arabia’s East-West pipeline was shut after an attack by Houthi rebels, and crude loading at the Yanbu terminal on the Red Sea was also halted. In Libya, three oil fields stopped operating.

Brent crude for November settlement rose 2.90% to close at $108.75 a barrel. West Texas Intermediate for October delivery jumped 4.38% to settle at $105.83 a barrel. Both contracts ended at their highest levels since May 19.

Among top market-cap stocks, semiconductor shares posted modest gains. Samsung Electronics rose 0.10% to 248,750 won, while SK Hynix added 0.71% to 1.702 million won. LG Energy Solution climbed 2.05%, KB Financial Group gained 0.23%, and Samsung Electro-Mechanics rose 0.15%.

By contrast, Hyundai Motor fell 0.82%, Samsung Biologics lost 0.57%, Samsung Life Insurance slipped 0.53%, SK Square declined 0.40%, and Samsung C&T dropped 0.29%.

The Kosdaq also moved lower. At the same time, the index was down 6.31 points, or 0.78%, at 806.10. Foreign investors were net sellers of 48.6 billion won and institutions sold a net 3.8 billion won, while retail investors were net buyers of 52.7 billion won.

Alteogen and Robotoz each fell 2.31%. Simtech dropped 1.91%, Wonik IPS lost 1.85%, Leeno Industrial declined 1.56%, Rainbow Robotics fell 1.27%, and EO Technics slipped 1.12%. Ecopro rose 0.24%.

Investor focus is on the FOMC’s rate decision. According to CME FedWatch, the rates futures market is pricing in a 94.5% chance of a 0.25 percentage-point increase in the benchmark rate in September.