Stocks drop again as rate worries rattle investors

Stocks tumbled by more than 2 percent to dip below the 3,000-point threshold Wednesday on massive foreign selling, largely due to concerns over a U.S. bond yield hike that drove the key stock index down for the past few sessions.

A screen at Hana Bank's trading room in central Seoul shows the Kospi closing at 2,994.98 points on Wednesday, down 75.11 points, or 2.45 percent from the previous trading day. [YONHAP]

Stocks tumbled by more than 2 percent to dip below the 3,000-point threshold Wednesday on massive foreign selling, largely due to concerns over a U.S. bond yield hike that drove the key stock index down for the past few sessions. The won fell against the dollar.

The benchmark Kospi dipped 75.11 points, or 2.45 percent, to close at 2,994.98 points.

Trading volume was moderate at about 1.5 billion shares worth some 16.7 trillion won ($17.7 billion), with losers outnumbering gainers 835 to 57.

Foreigners sold a net 432 billion won, while retail investors purchased a net 554 billion won. Institutions offloaded a net 127 billion won.

"The increase in foreign sell-offs raised uncertainties," said Kiwoom Securities analyst Seo Sang-young.

Investor concerns grew as optimism for quick global recovery spurred speculation of rate hikes.

Foreign selling continued despite the Federal Reserve chairman's overnight comments that the Fed would continue its fiscal policy support.

Most large caps closed lower.

Samsung Electronics closed unchanged at 82,000 won, and chipmaker SK hynix shed 1.81 percent to 136,000 won.

Pharmaceutical firm Samsung Biologics lost 1.71 percent to 747,000 won, and Celltrion dipped 4.73 percent to 282,000 won.

Internet portal giant Naver retreated 4.23 percent to 374,000 won, with its rival Kakao dipping 2.77 percent to 473,500 won.

Online game maker NCSoft edged up 0.32 percent to 934,000 won, while its rival Netmarble dropped 1.59 percent to 123,500 won.

Battery makers and automakers dropped after Hyundai Motor said it will replace batteries in over 25,000 Kona electric vehicles (EVs) due to defects in battery cells.

Hyundai Motor, the country's largest automaker, moved down 3.89 percent to 235,000 won.

Chemical maker LG Chem, whose batteries were used in Kona EVs, fell 2.82 percent to 860,000 won, and rechargeable battery maker Samsung SDI dropped 3.24 percent to 687,000 won.

The Kosdaq fell 30.29 points, or 3.23 percent to close at 906.31.

The local currency closed at 1,112.2 won per dollar, up 1.6 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on the three-year bond lost 1.7 basis points to close at 1.006 percent, and the yield on the 10-year bond fell 1.4 basis points to close at 1.34 percent.

BY CHEA SARAH, YONHAP [chea.sarah@joongang.co.kr]