On Wednesday, South Korea's Kospi index experienced a significant decline, plunging over 10% and prompting a trading halt on the Korean Stock Exchange. This marks the worst session for the index since August 2024, as the escalating conflict in the Middle East spurred widespread sell-offs in risk assets.
In addition to South Korea, Japan's stock markets were also impacted, with the Nikkei and Topix indices falling nearly 4%. Thailand's stock exchange witnessed a 7.8% drop, while Hong Kong's Hang Seng Index decreased by 3% and China's Shanghai Composite fell by 1.3%.
According to analysts, the heightened volatility is attributed to South Korea's heavy reliance on oil imports, with 94% sourced from abroad and 75% of that coming from the Middle East. This situation has led to increased panic among investors, particularly within the South Korean markets.
In a broader context, crude oil prices surged amid these tensions, with Brent oil rising 14% to $82 per barrel, and WTI crude increasing 12% to $75 per barrel since airstrikes began on February 28. The implications of these developments continue to unfold in the global financial landscape.