Kospi swings from 7,200 to 6,800 in a single session as oil prices, bond yields weigh

The Kospi snapped a five-session winning streak Tuesday, tumbling back to the 6,800 range after briefly surging past 7,200 in early trading on semiconductor strength. Rising crude oil prices and global government bond yields eroded investor confidence, wiping out all of the morning's gains.

The retreat deepened as upward momentum in Samsung Electronics and SK Hynix faded and institutional selling intensified. The Kosdaq also fell more than 3 percent, ending its own six-session run of gains.

According to Korea Exchange, the Kospi closed down 108.11 points, or 1.55 percent, at 6,869.83. The index climbed as high as 7,216.62, a gain of 3.42 percent, in the morning session before reversing course around midday in a classic "strong open, weak close" pattern. The index had been rising every day since Aug. 10.

Institutional investors drove the decline, posting net selling of 784.9 billion won ($555 million) on the Kospi. Foreign investors, who had bought aggressively in the morning, ended the day with net purchases of just 86 billion won. Individual investors recorded net purchases of 731.2 billion won but could not reverse the downward trend.

The Kospi opened higher after semiconductor stocks performed strongly on Wall Street overnight, lifting large-cap chip names at home as well. Samsung Electronics rose as much as 4.92 percent intraday, while SK Hynix surged as high as 8.94 percent.

The rally unraveled as unfavorable macro factors came into focus and the two semiconductor heavyweights lost their upward momentum. Persistent tensions between the United States and Iran stoked fears of crude supply disruptions, pushing oil prices higher and reviving inflation concerns — which in turn drove market interest rates back up.

West Texas Intermediate crude futures for September delivery approached $85 per barrel, while the yield on the 10-year US Treasury note climbed well past 4.7 percent.

A spike in Japan's 10-year government bond yield added further pressure on domestic markets. Reuters reported that the Japanese 10-year yield hit 2.935 percent, its highest level in 30 years. Japan's Nikkei 225 fell 2.54 percent in the wake of the move.

As sentiment deteriorated, Samsung Electronics reversed course and closed down 2.19 percent at 268,500 won, while SK Hynix gave back most of its gains to finish up just 1.03 percent at 1.662 million won. Among other large caps, Samsung Life rose 3.16 percent, while SK Square fell 1.65 percent, Samsung Electro-Mechanics dropped 7.57 percent and Hyundai Motor declined 3.97 percent.

The Kosdaq closed down 30.45 points, or 3.52 percent, at 834.20, also snapping a six-session winning streak. The index opened up 0.22 percent at 866.59 before swinging between gains and losses and then accelerating its decline around midday.

Institutional investors were also net sellers on the Kosdaq, offloading 416.4 billion won. Individual investors and foreign investors were net buyers, purchasing 389.2 billion won and 36.7 billion won, respectively.

Among top Kosdaq stocks by market cap, Alteogen fell 5.10 percent, Ecopro dropped 6.94 percent and Ecopro BM declined 6.51 percent. On the upside, Jusung Engineering gained 0.84 percent, EO Technics rose 2.48 percent and Simtec advanced 2.02 percent.

The won continued to strengthen against the dollar. As of 3:30 p.m. in the Seoul foreign exchange market, the won-dollar rate fell 1.2 won to 1,411.8 won per dollar.