KOSPI Falls on Surge in U.S. Treasury Yields... Sell Sidecar Triggered [fn Morning Market Update]

[Financial News] A U.S.-driven interest rate shock has hit the domestic stock market. As long-term U.S. government bond yields surged to their highest level in 19 years, KOSPI fell more than 6% intraday, prompting a sell sidecar. With foreign investors and institutions both selling, blue-chip stocks such as Samsung Electronics and SK hynix are tumbling across the board.
As of 10:01 a.m. on the 19th, KOSPI was down 5.56% from the previous session at 6,487.70. The index opened at 6,528.77, down 341.06 points, or 4.96%, from the previous close.
The losses widened further in early trading. Around 9:06 a.m., KOSPI's decline deepened to more than 6%, triggering the sell sidecar.
Selling pressure from foreign investors and institutions is also intense. On the Korea Exchange Main Board, individual investors are absorbing the supply with a net purchase of 1.9221 trillion won, while foreigners and institutions are posting net sales of 1.3422 trillion won and 673.7 billion won, respectively.
What is weighing on the market is the sharp rise in global long-term yields. The yield on 30-year U.S. government bonds climbed as high as 5.337% intraday, reaching its highest level since 2007 before giving back some of the gains. Long-term government bond yields in Germany and Paris, France, also approached their highest levels since 2011 and 2008, respectively, while Japan's long-term yields neared an all-time high.
Market watchers say this global bond selloff is not just a U.S. issue. They note that growing concerns over fiscal soundness in many countries, combined with massive corporate bond issuance by Big Tech firms driven by the AI investment boom, are adding to supply pressure across the global bond market.
In particular, a wave of high-grade corporate bonds issued to fund AI infrastructure investment is competing with government bonds for investor money. Big Tech companies need huge amounts of capital for data center workload construction and AI semiconductor purchases, and their expanded bond issuance is giving investors more high-yield alternatives to government bonds. In other words, fiscal concerns are increasing government bond supply pressure, while the expansion of AI-related corporate bond issuance is pushing long-term yields higher at the same time.
The surge in long-term U.S. yields is also hitting domestic stock valuations hard. A market source said, "When U.S. government bond yields rise sharply, the expected return required from stocks also increases, which can intensify valuation adjustment pressure, especially on stocks that have risen quickly. From the perspective of foreign investors, bonds offering higher yields than equities, which are risk assets, become more attractive, so this could also lead to capital outflows from the domestic stock market."
Most large-cap stocks are also falling. Among the top 14 stocks by market capitalization, most are in decline except for Mobile Tactical Cannon program (2.27%) and LG Energy Solution (0.36%). SK Square led the losses with a sharp 10.66% drop, followed by Samsung Life Insurance (-7.89%), SK hynix (-7.70%), Samsung C&T Corporation (-7.32%), Samsung Electronics (-6.33%), and Hyundai Motor Company (-4.37%).
KOSDAQ is also weak. At the same time, the KOSDAQ (Korea Securities Dealers Automated Quotations) index was trading at 828.50, down 0.68% from the previous session. The index opened at 810.08, down 24.12 points, or 2.89%, from the previous close.

[email protected] Kim Hyun-jung Reporter