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A monitor in the trading room at KEB Hana Bank’s headquarters in Seoul displays KOSPI as it falls below the 3,000-point mark on Tuesday afternoon. (Yonhap News)

Korea’s benchmark stock index dipped below the 3,000-point line for the first time in more than six months over concerns about inflation, driven by the energy sector.

The Korea Composite Stock Price Index (KOSPI) dropped sharply on Tuesday, closing the day at 2,962.17, down 1.89% (57.01 points). That was the first time the KOSPI finished trading below 3,000 points since Mar. 24 (2,996.35).

The KOSPI first broke the 3,000-point barrier on Jan. 7 (3,031.68) of this year and reached an all-time record of 3,305.21 on July 6. Foreign investors pulled the index down on Tuesday, selling off more than 620 billion won (US$521.88 million) worth of stock.

Most large cap stocks took a tumble, including Samsung Electronics (-1.37%).

The technology-oriented KOSDAQ index faced an even greater shock. Korea’s secondary index closed trading at 955.37 after a 2.83% plunge (27.83 points). The yield on 10-year government bonds rose across the board to an annual rate of 2.291%.

The won-dollar exchange rate stayed level even as the global value of the dollar eroded amid choppy negotiations about raising the debt ceiling in the US.

Surging oil prices have stoked fears about inflation. On Monday, news that OPEC Plus, a consortium of oil-producing countries, had decided to keep increasing production at the current level drove the price of West Texas Intermediate crude to US$77.62 a barrel. That’s the highest price seen since Nov. 2014.

Inflation fears also caused the yield on US treasuries to rebound. Predictions that the US Federal Reserve may accelerate its timeframe for normalizing monetary policy by tapering, or reducing, its bond-buying program deflated stock prices in New York and drove the Nasdaq composite down by 2.14%.

Production disruptions resulting from power shortages in China are exacerbating fears that the price of consumer goods will spike, with no solution in the short term.

“Inflation, in general, is going to be a much bigger problem than the Fed believes,” said Jeremy Siegel, a professor at the Wharton School of the University of Pennsylvania, during an interview with CNBC. Siegel said this inflation could deliver a shock to financial markets.

By Han Gwang-deok, finance correspondent

Please direct questions or comments to [english@hani.co.kr]