Kospi Tumbles on Oil Price Spike and Rising Yields

The South Korean stock market took a hit on Wednesday as oil prices surged and global bond yields rose, putting pressure on technology and industrial companies. The KOSPI index fell 2.86% to 6,640.26 by late morning, with Samsung Electronics down 2.97% and SK Hynix losing 3.13%. These two companies had helped stabilize the benchmark just a day earlier through large share-buyback programs.

Despite the sell-off, analysts believe that buybacks could continue to cushion supply-demand conditions into the third-quarter earnings season. However, they also warn that buybacks alone cannot indefinitely offset broad investor selling.

Kiwoom Securities researcher Han Ji-young noted that Korean equities have become unusually sensitive to negative macro variables, particularly oil prices and long-term yields. She advises investors to watch whether US-Iran tensions ease and whether bond markets in the US and Japan can stabilize.