Stocks drop more than 1 percent for a second straight day

A screen in the Hana Bank's trading room in central Seoul shows the Kospi closing at 3,060.27 points on Wednesday, down 37.65 points, or 1.22 percent, from the previous trading day. [NEWS1]

Stocks slumped for second straight day to lose more than 1 percent Wednesday amid concerns about spiking bond yields and the U.S. debt ceiling. The won rose against the dollar.

The Kospi dipped 37.65 points, or 1.22 percent, to close at 3,060.27 points.

Trading volume was moderate at about 812 million shares worth some 15 trillion won ($12.7 billion), with losers outnumbering gainers 676 to 215.

Foreigners sold a net 662 billion won, while retail investors bought 961 billion won. Institutions offloaded a net 312 billion won.

Stocks opened steeply lower on an overnight plunge on Wall Street.

The tech-heavy Nasdaq composite plummeted 2.83 percent and the S&P 500 dipped 2.04 percent. The Dow Jones Industrial Average retreated 1.63 percent.

Investor sentiment weakened over growing concerns the U.S. debt ceiling may lead to critical consequences.

"The U.S. Treasury yields have steeply increased over the past seven sessions, pressuring the Kospi," said Eugene Investment & Securities analyst Huh Jae-hwan.

Korea's daily new Covid-19 cases surged to 2,885 on Wednesday, the second-highest tally since the outbreak of Covid-19 in January last year, as cases soared in the greater Seoul area.

Most large caps closed lower.

Samsung Electronics lost 2.88 percent to 74,100 won, and chipmaker SK hynix shed 3.38 percent to 100,000 won.

Naver retreated 1.4 percent to 387,000 won, and Kakao fell 0.85 percent to 116,500 won.

Chemical firm LG Chem declined 1.16 percent to 767,000 won, and automaker Hyundai Motor closed unchanged at 201,500 won.

Pharmaceutical firm Samsung Biologics added 0.34 percent to 874,000 won, while Celltrion lost 0.95 percent to 261,000 won.

The Kosdaq fell 11.05 points, or 1.09 percent, to close at 1,001.46.

The local currency closed at 1,181.8 won against the dollar, down 2.6 won from the previous session's close.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds lost 0.6 basis point to 1.603 percent, and the yield on the benchmark 10-year government bond gained 5.8 basis points to 1.54 percent.

BY LEE TAE-HEE, YONHAP [lee.taehee2@joongang.co.kr]