Asian Markets Plummet Amid War Fears, South Korea's Kospi and Kosdaq Decline by 12%

South Korean Markets Crash Amid Escalating Middle East Tensions

Market Overview

On Wednesday, the South Korean markets experienced a sharp sell-off, tracking a broader decline in Asian markets. The Kospi and Kosdaq indices hit their lower circuit limits, with the Kospi plummeting over 12% and the Kosdaq declining by approximately 13%.

Index Performance

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The Kospi index has now suffered its worst two-day performance since the 2008 global financial crisis, according to Bloomberg data. The index fell to 5,065.14 in early afternoon trade, prompting a trading halt due to a circuit breaker. The Kosdaq also triggered a trading halt under market stabilisation measures.

Sector Performance

Chip giants Samsung and SK hynix, which led the surge in South Korean markets this year, declined by around 10%. The fall in South Korean markets follows a broader sell-off in global markets, including Japan, Hong Kong, and India.

Global Market Impact

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The ongoing conflict between the US and Israel, and the resulting retaliation by Iran, has sparked fears of a prolonged region-wide war. This has led to a surge in crude oil prices, with prices rising over 10% this week. The conflict has also raised concerns among export-dependent economies, including South Korea, which is the world's fourth-largest importer of crude oil.

Market Capitalisation

The Indian stock market also suffered a significant decline, with the benchmark Sensex and Nifty 50 trading over 2% lower each. 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.