South Korean stocks tumble 4% amid U.S.-Iran tensions and inflation worries

SEOUL, Sept. 2 (Yonhap) -- South Korean stocks tumbled 4 percent Wednesday as renewed hostility between the United States and Iran pushed up crude prices and fueled inflation worries. The Korean won rose against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 6,562.72, down 273.08 points, or 3.99 percent, ending a two-session winning streak.

Overnight, the U.S. launched a new round of airstrikes against Iranian targets around the Strait of Hormuz, driving oil prices higher and fanning inflation worries again.

With higher odds of a rate hike at the Federal Reserve's meeting later this month, all three major U.S. stock indexes finished lower, and the benchmark 10-year U.S. Treasury yield rose to the highest point since January last year.

Trade volume was light at 321.2 million shares worth 18.6 trillion won (US$13.6 billion), with losers far outnumbering winners 734 to 137.

Foreign and institutional investors dumped a net 1.9 trillion won and 2 trillion won of shares, respectively, while individuals bought a net 2.3 trillion won.

"The KOSPI went bearish as investor sentiment was dragged down by rising oil prices and sovereign debt yields in major economies," said Lee Kyung-min, an analyst from Daishin Securities.

Market bellwether Samsung Electronics fell 4.02 percent to 250,500 won, and SK hynix tumbled 4.73 percent to 1.61 million won.

Top carmaker Hyundai Motor sank 5.62 percent to 378,000 won, and its sister Kia slumped 5.18 percent to 124,400 won.

Battery makers were also weak as industry leader LG Energy Solution decreased 5.31 percent to 347,500 won and POSCO Future M plunged 8 percent to 176,000 won.

Internet giant Naver skidded 2.79 percent to 209,000 won, and its rival Kakao dipped 3.84 percent to 35,100 won.

The Korean won was quoted at 1,368.7 won against the U.S. dollar, up 1.7 won from the previous stock trading session.