(2nd LD) Seoul stocks fall for 2nd day on inflation woes

Seoul's stock market experienced a second day of decline on Tuesday as rising oil prices intensified inflation concerns and pushed U.S. Treasury yields upward due to Middle East tensions. The Korea Composite Stock Price Index (KOSPI) dropped 18.93 points, or 0.27%, to close at 6,870.81, marking its second consecutive loss. The Korean won strengthened against the U.S. dollar.

The benchmark KOSPI opened 0.19% lower and continued its downward trend during afternoon trading as foreign and institutional investors sold local shares. In the meantime, U.S. stocks fell as renewed tensions between Washington and Tehran led to higher crude oil prices, raising concerns that increased energy costs could sustain high inflation and interest rates. The benchmark 10-year Treasury yield reached 5.23%, and the 30-year yield climbed to 5.55%, nearing multiyear highs.

Oil prices climbed for a second straight day due to lingering uncertainties about potential supply disruptions in the Middle East due to the U.S.-Iran conflict. Trading volume was relatively low at 210.06 million shares worth 17.99 trillion won ($13.26 billion), with decliners outnumbering advancers 622 to 231. Foreign investors sold a net 2.9 trillion won, while domestic individuals and institutions bought a net 1.14 trillion won and 121.06 billion won, respectively.

Analysts attributed the bearish sentiment to rising U.S. Treasury yields, which negatively impacted investor confidence. However, market leaders such as Samsung Electronics and SK hynix showed slight gains, while Hyundai Motor and battery maker LG Energy Solution experienced minor declines. The Korean won closed at 1,356.7 won per U.S. dollar, up 3.2 won from the previous session's close.

Bond prices, inversely related to yields, saw a slight rise, with the three-year Treasury yield falling by 4.3 basis points to 4.076% and the five-year government bond return decreasing by 6.9 basis points to 4.276%.