Korea Halts Trading as Kospi, Kosdaq Plunge 10% on Mideast Crisis
South Korea halted stock trading on Wednesday after sharp declines linked to escalating conflict in the Middle East triggered circuit breakers on both the Kospi and Kosdaq. Each index fell more than 10% during morning trade in Seoul, marking their worst session since August 2024, Channel News Asia reported.
Regional markets also weakened. Japan’s Nikkei and Topix slipped almost 4%, Hong Kong’s Hang Seng Index lost 3%, and China’s Shanghai Composite declined 1.3%, according to Google Finance.
“Investors sold down risk assets, and in particular, the Nikkei as well as the Kospi, which outperform other major indexes, have become a target of the heavier selloff as they try to book profits,” said Kazuaki Shimada, chief strategist at IwaiCosmo Securities, as cited by Channel News Asia.
Bianco Research CEO Jim Bianco noted that South Korea imports 94% of its oil, with 75% sourced from the Middle East, making it especially sensitive to supply risks.
Thailand, another significant importer of Middle Eastern crude, saw its benchmark index drop 7.8% on Wednesday.
U.S. weighs tanker escorts as tensions rise; oil prices jump
Fox News reported on Wednesday that attacks on Iran are intensifying, with the United States targeting a meeting of the nation’s senior leadership as succession decisions were being made. The report followed the closure of the Strait of Hormuz after Iranian threats against oil and cargo vessels passing through the waterway.
“If necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz as soon as possible,” Donald Trump said on Truth Social. He added on Tuesday that the United States has a “virtually unlimited supply” of weapons and that wars can be “fought forever” (source).
Crude prices surged on the developments, with Brent up 14% to $82 per barrel and WTI higher by 12% to $75 per barrel since airstrikes began on Feb. 28, according to OilPrice.
Researcher calls market shock a ‘black swan’ as crypto shows smaller move
Crypto researcher SungHoon Lee described the sell-off as a black swan event, noting that Korean trading was suspended because the decline unfolded faster than systems could process. He estimated that $3.2 trillion in global equity market capitalization has been erased over the past four days, calling it the worst geopolitical shock since the 1973 oil crisis.
Digital asset markets were comparatively steady, with total crypto market capitalization down 0.5% on the day to $2.39 trillion, according to CoinGecko. Crypto assets are down 21% so far this year.
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