[Edaily Reporter Kim Kyung-eun ] Insurance stocks and financial holding companies are rallying across the board as U.S. long-term Treasury yields surge to their highest level in 34 months. This is interpreted as buying interest flowing into financial stocks—which are expected to benefit relatively in a high-interest-rate environment—amid growing concerns about inflation driven by rising international oil prices and the increasing likelihood of further interest rate hikes by the U.S. Federal Reserve (Fed).

According to MP Doctor on the 3rd, as of 9:50 a.m. that day, HANWHA LIFE INSURANCE(088350)was trading at 6,520 won, up 750 won (13.00%) from the previous trading day. Major insurance stocks such as Hanwha General Insurance Co.,Ltd.(000370)(7.46%), DB INSURANCE(005830)(6.86%), HeungkukFire&MarineInsurance(000540)(6.23%), and MIRAE ASSET Life Insurance CO., Ltd.(085620)(3.73%) were all rising.

JB Financial Group Co., Ltd.(175330)Financial holding companies are also showing strength across the board, including Meritz Financial Group(138040)(6.22%), (6.16%), KB Financial Group(105560)(5.09%), BNK Financial Group Inc.(138930)(4.82%), and ShinhanFinancialGroup Co.,Ltd.(055550)(4.07%).

It appears that last night’s rise in U.S. Treasury yields stimulated investor sentiment toward financial stocks. On the 2nd (local time), the yield on the 10-year U.S. Treasury note surpassed 4.82% during the trading session, reaching its highest level in approximately 2 years and 10 months—since November 2023. Although it subsequently retreated slightly to the 4.79% range, it remained at a high level.

Typically, rising interest rates heighten expectations for improved investment returns at insurance companies. Life insurers, in particular, hold a high proportion of interest-bearing assets—including long-term bonds—which could lead to higher returns on newly invested assets.

Financial holding companies focused on banking can also see growing expectations for improved net interest margins (NIM) and increased interest income if interest rates remain high. Unlike growth stocks—such as semiconductor stocks—which have recently been burdened by rising interest rates, financial stocks are viewed as a sector with relatively strong resilience to high interest rates.

Kang Song-cheol, an analyst at EUGENE INVESTMENT & SECURITIES, said, “The phenomenon of financial stocks rising during a period of rising interest rates indicates that the economic situation is favorable,” adding, “They may be less burdened by rising interest rates.”