South Korean markets in freefall, log steepest drop since 2001 amid Iran conflict

Seoul shares plunged more than 12 per cent on Wednesday, closing below the 5,100-point mark, as mounting concerns over the economic fallout from the escalating Middle East conflict rattled investor sentiment. The Korean won also fell sharply against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) tumbled 698.37 points, or 12.06 per cent, to close at 5,093.54, extending losses from a 7.24 per cent drop in the previous session, reports Yonhap news agency.

The 12.06 per cent fall marked the steepest one-day decline since Sept. 12, 2001, in the aftermath of the Sept. 11 terrorist attacks in the United States. Trade volume was heavy at 1.6 billion shares worth 62.6 trillion won ($42.5 billion). Losers sharply outnumbered winners 908 to 12. The Korea Exchange (KRX) triggered circuit breakers shortly after the KOSPI fell more than 8 per cent amid heightened geopolitical tensions.

Earlier in the session, the KRX activated a five-minute sell-side sidecar immediately after the opening bell, temporarily halting program-driven sell orders in KOSPI futures. A similar sidecar was also issued on the tech-heavy KOSDAQ market. The US and Israel carried out coordinated strikes on Iran over the weekend, killing Iran’s Supreme Leader Ayatollah Ali Khamenei. U.S. President Donald Trump signaled the possibility of a prolonged military campaign.