South Korea’s financial markets were thrown into turmoil after the Korea Exchange halted trading when benchmark indexes tumbled more than 10% in early Wednesday sessions. The sharp decline in both the Kospi and Kosdaq activated automatic circuit breakers, marking their steepest single day drop since August 2024.
The selloff followed escalating conflict in the Middle East, sparking a broad flight from risk assets across Asia. Japan’s Nikkei 225 and TOPIX each fell nearly 4%, while Hong Kong’s Hang Seng Index slid about 3%. Mainland China’s Shanghai Composite posted more modest losses.
Bianco Research CEO Jim Bianco said;
Oil Shock Amplifies Market Panic
South Korea’s heavy reliance on imported energy heightened investor anxiety. The country sources roughly 94% of its oil from abroad, with a large share coming from the Middle East. Fears intensified after the reported closure of the Strait of Hormuz, a critical shipping route for global crude supplies.
Donald Trump said on Truth Social;
Oil prices surged in response. Brent crude jumped 14% to around $82 per barrel, while West Texas Intermediate climbed 12% to approximately $75 since late February. The spike revived memories of the 1973 oil crisis, a period that triggered prolonged global market instability.
Meanwhile, global equities have shed an estimated $3.2 trillion in value over four days, underscoring the scale of the geopolitical shock rippling through financial markets.
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