Seoul:South Korean shares declined on Wednesday as rising U.S. Treasury yields raised concerns about higher borrowing costs, affecting investor sentiment. The Korean won also weakened against the U.S. dollar.

According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) fell by 32.77 points, or 0.48 percent, to close at 6,838.04, marking its third consecutive session of losses. Despite a decline in oil prices, U.S. stocks ended slightly lower overnight, with persistently high Treasury yields keeping investors cautious.

Global bond yields have reached multi-year highs due to concerns that elevated energy prices could sustain inflationary pressures, potentially leading to further interest rate hikes. The yield on the 30-year U.S. Treasury reached 5.6 percent, its highest level in 24 years, while the benchmark 10-year yield remained above 5.2 percent, the highest since 2007. Trade volume was light, with 264.24 million shares worth 18.81 trillion won (US$13.89 billion) changing hands, and decliners outnumbering advancers 511 to 351.

Foreign investors and institutions sold a net 2.05 trillion won and 767.97 billion won, respectively, while individual investors purchased a net 1.17 trillion won. Han Ji-young, an analyst at Kiwoom Securities, noted that while the market had largely anticipated further increases in the 10-year U.S. Treasury yield, the faster-than-expected pace of the rise has continued to weigh on stocks.

Market heavyweights showed mixed results. Samsung Electronics, a market bellwether, fell 1.47 percent to 268,500 won, whereas chip giant SK hynix edged up 0.62 percent to 1.78 million won. Financial shares were predominantly in negative territory, with KB Financial Group dropping 2.71 percent to 168,800 won and Shinhan Financial Group falling 3.98 percent to 106,100 won.

The Korean won was quoted at 1,352.8 won per U.S. dollar as of 3:30 p.m., up 1.2 won from the previous session's close. Bond prices, which move inversely to yields, closed higher, with the yield on three-year Treasurys falling 6.5 basis points to 4.011, and the yield on the benchmark five-year government bonds decreasing by 7.3 basis points to 4.203.