Seoul shares sink nearly 6 pct on tech rout, rising yields

SEOUL, August 19 - Shares on the Seoul market plummeted around 6% on Wednesday, primarily due to sharp declines in chip manufacturers, as escalating oil prices and increasing global bond yields adversely impacted investor confidence. The Korean currency, the won, strengthened against the US dollar. The main KOSPI index lost 398.66 points, or 5.8%, to close at 6,471.17, after dipping to a low of 6,400.81 during the trading day.

Immediately following the start of trading, program trading in KOSPI-listed stocks was temporarily halted for five minutes as the exchange activated a sell-side sidecar mechanism. This automatic intervention occurs when the KOSPI 200 futures index declines by 5% or more for a duration of at least one minute. Prior to the market opening, major US indices had reported losses, as persistent peace talks between the United States and Iran had a negative effect on investor sentiment, resulting in higher oil prices.

The yield on the US 30-year Treasury bond surged to its highest level since 2007, reflecting worries that rising energy costs could contribute to sustained inflation. A key market indicator, Samsung Electronics, plummeted by 7.82%, while its rival in the chip industry, SK hynix, suffered a 9.75% decline.