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Seoul Stocks Crash 5% as Middle East Conflict Sparks Market Panic

South Korean stocks plunged nearly 5% Tuesday morning, triggering a temporary trading halt, as markets reacted to escalating Middle East tensions following U.S. airstrikes on Iran. The sharp sell-off marked the first activation of a sell-side circuit breaker since early January, with the benchmark KOSPI index dropping almost 4%. Major shares like Samsung Electronics and Korean Air led the decline, while defense and oil-related stocks saw significant gains. The market turmoil reflects broad investor anxiety over the potential global economic fallout from the conflict.

Key Points: Seoul Shares Plunge 5% on Middle East Conflict Fears

  • KOSPI 200 Futures triggered sell-side circuit breaker
  • Index fell over 5% in sharpest drop since January
  • Tech and airline stocks led the decline
  • Defense and oil refinery shares surged
  • Korean won weakened against the U.S. dollar
2 min read

Seoul shares plunge sharply over Middle East conflict woes

South Korean stocks plummet, triggering a circuit breaker, as U.S. airstrikes on Iran spark global economic concerns and market sell-off.

"Selling of the KOSPI 200 Futures index was suspended for five minutes - Korea Exchange"

Seoul, March 3

South Korean stocks plummeted nearly 5 per cent late Tuesday morning amid escalating concerns over possible economic impacts from the ongoing Middle East conflict.

South Korea's main bourse operator, the Korea Exchange (KRX), issued a sell-side circuit breaker, temporarily halting trading after a sharp drop sparked by market concerns over U.S. airstrikes on Iran.

Selling of the KOSPI 200 Futures index was suspended for five minutes at 12:05 p.m., according to KRX.

The index fell 47.75 points, or 5.09 percent, to 890.05 at that time. It marked the first sell-side circuit breaker since Jan. 6.

A sell-side sidecar is triggered when the KOSPI 200 Futures index drops 5 percent or more for at least one minute.

Opening 1.26 percent lower, the benchmark Korea Composite Stock Price Index (KOSPI) fell 246.98 points, or 3.96 per cent, to 5,997.15 as of 11:20 a.m. in the first trading session following the U.S.-led attacks on Iran, reports Yonhap news agency.

The South Korean financial market closed Monday in observation of the March 1 Independence Movement Day holiday.

Overnight, U.S. stocks closed mixed as investors digested the U.S. air strikes on Iran. The Dow Jones Industrial Average fell 0.15 percent, but the Nasdaq Composite gained 0.36 percent.

In Seoul, major shares led the decline.

Market bellwether Samsung Electronics sank 5.2 percent, and its chipmaking rival SK hynix tumbled 5.66 percent.

Samsung Biologics, leading pharmaceutical firm, lost 3.77 percent, and flag air carrier Korean Air plunged 8.99 percent.

However, S-Oil, an oil refinery firm whose largest shareholder is Saudi Arabia's Aramco, surged 16.45 percent, and defense giant Hanwha Aerospace soared 11.72 percent.

The Korean won was trading at 1,467.3 won against the U.S. dollar as of 11:20 a.m., down 27.6 won from the previous session.

- IANS

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Reader Comments

P
Priya S
Seeing Samsung and SK hynix tumble over 5% is concerning. They are major suppliers for our electronics industry too. This could impact supply chains and component prices in India. On the other hand, the surge in defense stocks like Hanwha is telling. Geopolitical tensions always benefit that sector.
R
Rohit P
Oil prices are the real worry for us. The won is already down against the dollar. If crude spikes because of this, our import bill will shoot up, putting pressure on the rupee and inflation. Time to be cautious with investments.
S
Sarah B
While the market reaction is severe, I hope the media coverage also focuses on the human cost of the conflict itself, not just the financial numbers. The article is very data-heavy, which is important, but context matters too.
V
Vikram M
Interesting to see S-Oil surging 16% because of its Aramco link. Shows how specific companies can benefit from turmoil. In India, we might see similar moves in OMCs and certain defense PSUs if tensions escalate further. Market is all about identifying these pockets.
K
Karthik V
A 5% drop triggering a halt is a smart mechanism to prevent panic selling. Does India have a similar circuit breaker system for our indices? I think we do, but such a sharp, news-driven fall tests the system. Stay safe, investors.

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