Struggling with a bearish trend before the Chuseok holiday, the KOSPI index experienced a sharp decline of over 2 percent on Oct. 4, falling below the 2,400 mark as it was hindered by the rapid increase in U.S. Treasury bond yields. Concurrently, the won-U.S. dollar exchange rate reached its highest point in 11 months.
On Oct. 4, the KOSPI index closed at 2,405.69, down by 59.38 points, or 2.41 percent, from the previous trading session. The index had started the day at 2,435.78, showing a decline of 1.19 percent and continued to widen its losses throughout the session.
The KOSPI closing in the 2,400 range marks the first time since March 27 of this year when it reached 2,409.22 over six months ago. The total market capitalization of the KOSPI has decreased by 45 trillion won from 1,955 trillion won on the previous trading day on Sept. 27 to 1,909 trillion won.
Foreign investors had net sales of 400 billion won, while institutional investors also had net sales of 460 billion won. However, individual investors stepped in by purchasing 830 billion won worth of stocks, managing to keep the KOSPI above the 2,400 mark.
The majority of top market capitalization stocks ended in decline, with a significant widening of losses primarily seen in growth stocks like secondary battery-related companies due to the impact of high interest rates. Notably, stocks such as POSCO Future M saw a decline of 6.54 percent, Samsung SDI fell by 5.37 percent, and LG Energy Solution dropped by 4.30 percent.
On the same day, the KOSDAQ index finished the trading session at 807.40, registering a decline of 33.62 points, or 4.00 percent, compared to the previous trading day. This is the first time that the KOSDAQ index has seen a drop of over 4 percent since July 26 when it dropped 4.18 percent.
Amid the prolonged tightening outlook of the U.S. Federal Reserve (Fed), U.S. bond yields have reached their highest level in 16 years, recording consecutive highs. The benchmark 10-year U.S. Treasury bond yield, which plays a role as a benchmark for global bond rates, was in the 4.5 percent range on Sept. 27. However, it exceeded 4.8 percent on Oct. 3 (local time), marking the highest level in 16 years since August 2007.
On this day in the Seoul foreign exchange market, the won to U.S. dollar exchange rate once again reached a record high, closing at 1,363.50 won, which was an increase of 14.20 won, or 1.05 percent, compared to the previous trading day. This is the highest level since Nov. 10 of last year when it closed at 1,377.5 won.