South Korean shares retreat for third session as U.S. bond yields rise

SEOUL, Sept. 30 (Yonhap) -- South Korean shares retreated Wednesday as rising U.S. Treasury yields raised concerns over higher borrowing costs and dampened investor sentiment. The Korean won weakened against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 32.77 points, or 0.48 percent, to end at 6,838.04, marking its third consecutive session of losses.

Overnight, U.S. stocks ended slightly lower despite a decline in oil prices, as persistently high Treasury yields kept investors cautious.

Global bond yields have risen to multi-year highs amid concerns that elevated energy prices could keep inflationary pressures high and lead to further interest rate hikes.

The yield on the 30-year U.S. Treasury topped 5.6 percent, its highest level in 24 years, while the benchmark 10-year yield remained above 5.2 percent, its highest level since 2007.

Trade volume was light at 264.24 million shares worth 18.81 trillion won (US$13.89 billion), with decliners outnumbering advancers 511 to 351.

Foreigners and institutions sold a net 2.05 trillion won and 767.97 billion, respectively, while individuals bought a net 1.17 trillion won.

"While the market has largely anticipated further increases in the 10-year U.S. Treasury yield, the faster-than-expected pace of the rise has continued to weigh on stocks," Han Ji-young, an analyst at Kiwoom Securities, said.

Market heavyweights were mixed.

Market bellwether Samsung Electronics fell 1.47 percent to 268,500 won, while chip giant SK hynix edged up 0.62 percent to 1.78 million won.

Financial shares were in negative territory.

KB Financial Group sank 2.71 percent to 168,800 won, while Shinhan Financial Group went down 3.98 percent to 106,100 won.

The Korean won was quoted at 1,352.8 won against the U.S. dollar as of 3:30 p.m., up 1.2 won from the previous stock trading session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys fell 6.5 basis points to 4.011, and the return on the benchmark five-year government bonds shed 7.3 basis points to 4.203.