South Korean stocks retreated Friday amid inflation uncertainties, as investor sentiment weakened from an overnight hike in long-term US Treasury yields. The Korean won fell against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 26.48 points, or 0.86 percent, to close at 3,039.53 points.

Trading volume was moderate at about 1.1 billion shares worth some 15.9 trillion won ($14.1 billion), with losers outnumbering gainers 447 to 378.

Foreigners sold a net 584 billion won, while retail investors purchased a net 1.6 trillion won. Institutions offloaded a net 1 trillion won.

The KOSPI lost more than 1.4 percent within the first 15 minutes of trading but recovered some of the losses.

Tech stocks, sensitive to inflation, deepened losses as the tech-heavy Nasdaq Composite tumbled 3.02 percent. The fall came amid a rise in the yield on the US 10-year Treasury note, which briefly topped the 1.75 percent mark for the first time since January last year.

"The steep rise in the US Treasury yields pressed down the stock prices," said Samsung Securities analyst Seo Jung-hoon.

"But expectations of a corporate earnings hike seem to have buffered some of the losses in the afternoon," he said.

In Seoul, top cap Samsung Electronics lost 1.21 percent to 81,900 won, and No. 2 chipmaker SK hynix shed 2.82 percent to 138,000 won.

Leading chemical firm LG Chem declined 3.6 percent to 830,000 won, and rechargeable battery maker Samsung SDI edged down 0.15 percent to 661,000 won. Top automaker Hyundai Motor went down 1.92 percent to 229,500 won.

Pharmaceutical firm Samsung Biologics decreased 1.94 percent to 708,000 won, and top internet portal operator Naver retreated 0.37 percent to 402,000 won.

The local currency was trading at 1,130.6 won against the US dollar, down 6.9 won from the previous session's close.
 
Bond prices, which move inversely to yields, closed mixed. The yield on three-year Treasurys added 1.3 basis points to 1.146 percent, but the return on the benchmark five-year government bond fell 5.2 basis points to 1.578 percent. (Yonhap)