South Korean markets crashed on Wednesday, tracking a broader sell-off across Asian markets, as the escalating war in the Middle East triggered a sharp risk-off sentiment among global investors. Benchmark indices — the Kospi and the Kosdaq — hit their lower circuit limits amid heavy selling pressure.
Extending losses from the previous session, South Korea’s Kospi index tumbled more than 12%, following a 7.2% slump in the previous session. The index is now on course for its worst two-day performance since the 2008 global financial crisis, according to Bloomberg data.
In early afternoon trade, the Kospi was down 12.6% at 5,065.14. The Korea Exchange temporarily halted trading in the benchmark index after a circuit breaker was triggered. The Kosdaq also slumped about 13%, prompting a trading halt under market stabilisation measures.
Chip giants Samsung and SK hynix, which led Seoul’s surge this year, dived around 10%.
The fall in South Korean markets follow a broader sell-off in the global markets, including the Japanese, Hong Kong and Indian stock market today.
The US-Israel continued their air strikes on Iran, while the Islamic Republic retaliated with heavy bombings in other Middle Eastern countries, sparking fears of a prolonged region-wide war. The conflict has sent the crude oil prices surging more than 10% this week, fanning inflation fears and raising concerns among export-dependent economies.
South Korea is the world’s fourth-largest importer of crude oil, according to US government data, and remains heavily dependent on energy supplies from the Middle East, making its economy particularly vulnerable to disruptions in the region.
The South Korean market had jumped more than 75% last year. This year, the Kospi had soared more than 50%, having hit multiple records, led by a rally in semiconductor heavyweights on strong memory chip demand.
Other Asian Markets
Asian markets slumped on Wednesday as the selling intensified amid fears of a prolonged war in the Middle East.
Japan’s Nikkei 225 was off more than 4%, with chipmakers Advantest and Tokyo Electron losing more than 4%. Hong Kong, Sydney, Singapore and Taipei all declined more than 2%, while Bangkok tumbled 8% to also spark a trading halt. Shanghai, Wellington, Manila and Jakarta were also deep in negative territory, AFP reported.
The Indian stock market also crashed, with the benchmark Sensex and Nifty 50, trading over 2% lower each, with heavy losses across sectors.
Investors lost ₹12 lakh crore as the overall market capitalisation of BSE-listed firms dropped to ₹445 lakh crore in intraday trade on Wednesday, compared to ₹457 lakh crore in the previous session.
(With inputs from Agencies)