South Korean markets crashed on Wednesday, in line with a sell-off in other Asian markets, with the benchmark indices, Kospi and Kosdaq hitting lower circuit limits, as the escalating war in the Middle East rattled investors globally.
Extending a steep sell-off from the previous session, South Korea’s Kospi index tumbled more than 12%, which followed a 7.2% slump in the previous session, as the index suffered its worst two-day performance since 2008 during the global financial crisis, according to Bloomberg data.
The Kospi dropped 12.6% to 5,065.14 in early afternoon trade. The Korea Exchange temporarily halted trading for the Kospi index, while a circuit breaker was activated on the Kosdaq as well, which declined about 13%.
Chip giants Samsung and SK hynix, which led Seoul’s surge this year, dived around 10%.
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 fourth-largest importer of crude oil in the world, according to US government figures, and relies heavily on fuel shipped from the Middle East.
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.
(With inputs from agencies)
