(2nd LD) Seoul stocks sink over 2.5 pct on chip losses

South Korean stocks experienced a sharp 2.5 percent decline on Monday, ending a four-day upward trend, due to profit-taking from major tech companies. The Korea Composite Stock Price Index (KOSPI) dropped 191.18 points, or 2.7 percent, to close at 6,889.74. Initially opening lower by 0.33 percent, the index faced intense selling pressure from foreign and institutional investors.

The KOSPI maintained its winning streak through Wednesday, pausing for South Korea's Thanksgiving-like Chuseok holiday on Thursday and Friday. Various factors, including rising bond yields and uncertain Middle East developments, were affecting investor sentiment. Despite U.S. markets showing gains on Friday, with the Dow Jones up 0.93 percent, S&P 500 up 0.51 percent, and Nasdaq Composite up 0.48 percent, rising U.S. Treasury yields dampened risk-taking appetite.

Trade volume was relatively light at 216.2 million shares, totaling 21.8 trillion won (US$15.9 billion), with foreign entities and institutions accounting for most of the selling activity. Samsung Electronics and SK hynix, two major chipmakers, saw significant declines of 5.43 percent and 5.05 percent, respectively, following opening gains.

The South Korean won weakened to 1,365.1 per U.S. dollar, down 7.6 won from the previous session's close. Bond prices fell, with the yield on three-year Treasurys rising 11.3 basis points to 4.119 percent and five-year government bonds up 12.5 basis points to 4.345 percent.