Logos of Samsung Electronics and SK hynix. [Korea Herald DB]
Logos of Samsung Electronics and SK hynix. [Korea Herald DB]

Samsung Electronics and SK hynix are both tumbling in early trading Wednesday. The selloff follows a broad overnight plunge in US semiconductor stocks, as rising crude oil prices driven by Middle East tensions and surging long-term US Treasury yields weighed on investor appetite for technology shares.

According to Korea Exchange, Samsung Electronics was trading at 247,500 won as of 9:28 a.m. Wednesday, down 21,000 won, or 7.82 percent, from the previous session. SK hynix fell 155,000 won, or 9.33 percent, to 1.51 million won. Samsung has now declined for two consecutive sessions, extending losses from Tuesday.

Selling pressure from foreign and institutional investors has been intense in both stocks. Foreign investors and institutions posted net selling of 1.1 trillion won and 417.8 billion won, respectively, in the electrical and electronics sector — which includes Samsung Electronics and SK hynix. Retail investors, meanwhile, absorbed the supply with net purchases of 1.53 trillion won.

Semiconductor stocks bore the brunt of the overnight selloff on Wall Street as well. Renewed inflation fears stemming from higher oil prices, compounded by a jump in long-term US Treasury yields, added to the pressure on technology shares.

A vessel attack in the Strait of Hormuz stoked fears of crude supply disruptions, pushing oil prices higher in futures markets. The yield on the 30-year US Treasury bond surpassed 5.33 percent during trading, reaching its highest level since 2007.

The impact of rising rates fell hardest on semiconductor stocks, which had posted sharp gains in recent weeks.

On Wall Street, Nvidia fell 2.34 percent, while Micron Technology dropped 7.02 percent, SanDisk fell 9.01 percent and Intel tumbled 6.58 percent. The Philadelphia Semiconductor Index declined 4.98 percent. SK hynix's American depositary receipts fell 9.20 percent overnight, foreshadowing the domestic share price decline.

Market analysts say a prolonged period of elevated interest rates could weigh on the valuations of technology stocks, whose share prices tend to reflect high expectations for future earnings.

"The likelihood of high interest rates persisting is significant," said Seo Sang-young, an analyst at Mirae Asset Securities. "If rates stay at this level, it will be a burden for technology stocks that price in substantial future earnings growth."


hajun825@heraldcorp.com