Global Bond Yields Surge, Middle East Tensions Rise… Pressure Mounts on Korean Stocks

Long-term government bond yields are rising in the US as well as other major economies, spreading a flight from risk assets across the market. This rise in bond yields pushes investors to shift funds from riskier assets like stocks toward safer assets like bonds.

Rising rates increase companies' funding costs, which can weigh on profitability.

Such increases raise companies' production costs and dampen consumption, weighing on the market broadly. The Strait of Hormuz is a key passage for a large share of the world's crude shipments, so instability there directly affects international oil prices.

As transit through the Strait of Hormuz plunged, shipping stocks rallied across the board. Only five vessels passed on the 15th and just one on the 16th, compared with roughly 30 on a typical weekend, effectively meaning the sea lane has been blocked. This has fueled expectations of higher freight rates, a positive for shipping-related companies' share prices.

In response, inter-Korean economic cooperation stocks rallied, with several hitting the daily limit up. Economic cooperation stocks move with the prospect of economic collaboration with North Korea and react sensitively to expectations of improved relations.

1 humanoid robot maker, has listed on the Shanghai stock market. Its retail subscription drew orders of more than 8,000 times the initial allocation, attracting intense interest. After listing, the company is valued at around 12.7 trillion won, reflecting high expectations for the robotics industry.

On one hand, there is concern that because Unitree can mass-produce very cheap, high-quality robots, it could become a formidable competitor to Korean finished-robot makers. This could pressure domestic robotics firms to secure price competitiveness and pursue technological differentiation.

Unitree's rise could create divergent outcomes between robot component suppliers and finished-robot makers. For companies supplying robot parts such as reducers and actuators, Unitree's mass production could be a tailwind. However, for finished-robot makers like Hyundai Motor or Samsung's Rainbow Robotics, the emergence of a powerful new competitor could be seen as a headwind.

Attention will focus on whether the decline is contained after the opening and whether a rebound follows. Investors should watch how closely the domestic market tracks the US market and set their response strategies accordingly.

LG Electronics said it met with Jensen Huang and plans to unveil a bipedal humanoid in the first quarter of next year. Hyundai Motor, meanwhile, is already building out the steps needed to commercialize its humanoid.

Hyundai's approach of already building out commercialization stages is seen as raising its investment appeal.

This is based on the outlook that competition in finished robots will intensify while demand for core components keeps growing steadily.

Robotis is currently viewed as an attractive investment. Its earnings were strong, and it is receiving supply momentum for actuators from China. These positive factors are expected to support its share price. Actuators are key components that drive robot movement, and demand for them is steadily rising.

Rising government bond yields mean bond selling is occurring in the bond market. When yields rise, bond prices fall, signaling that investors are selling bonds. This weighs on the stock market, as funds move into bonds and companies' funding costs rise, dampening overall investment sentiment.

As too many bonds were released, bond prices fell and yields rose. This raises Big Tech firms' funding costs and increases interest-rate pressure across the market. The rise in long-term government bond yields is intensifying this burden.

Heavy institutional selling is increasing downward pressure on the market. Even when individual investors try to buy the dip, it becomes hard to absorb institutional sell orders. Strong institutional selling reflects broad market weakness and adds to the difficulty of decisions for individual investors.

This shows how closely the Korean market is tied to global semiconductor trends. In particular, moves in the share prices and earnings of leading AI chip companies such as Nvidia are having a large impact on domestic chipmakers. Therefore, movements in the US market, especially semiconductor indices, are an important consideration for investing in Samsung Electronics and SK Hynix. Analysis of the overall global semiconductor industry is essential to outlooks for domestic companies' share prices.