Seoul's stock market plunged for a second day, with the KOSPI index falling 12.06% to close at 5,093.54 amid fears of economic fallout from the Middle East conflict. The Korean won weakened sharply against the U.S. dollar, trading at 1,476.20 won, down 10.1 won. The downturn followed U.S. and Israeli strikes on Iran that killed Supreme Leader Ayatollah Ali Khamenei.
On March 4, 2026, Seoul's stock market recorded its largest-ever daily loss amid escalating Middle East tensions. The benchmark KOSPI index fell 698.37 points, or 12.06%, to close at 5,093.54, surpassing the previous record of 12.02% set after the 2001 September 11 attacks on the U.S. This followed a 7.24% decline to 5,791.91 the previous day. The secondary Kosdaq index dropped 14% to 978.44.
The Korea Exchange (KRX) activated circuit breakers on both markets, halting trading for 20 minutes after the KOSPI fell more than 8% at 11:19 a.m., and the Kosdaq at 11:16 a.m. Sidecar curbs, which pause sell orders for five minutes, were triggered earlier at 9:06 a.m. on the KOSPI and 10:31 a.m. on the Kosdaq.
Investor activity was mixed. Institutions sold a net 579.4 billion won ($393 million) of KOSPI stocks, while foreigners and individuals bought 228.78 billion won and 72.9 billion won, respectively. On the Kosdaq, foreigners and institutions were net buyers of 1.11 trillion won and 25.6 billion won, against retail sales of 1.2 trillion won.
Sector performance diverged. Defense stocks like LIG Nex1 and Hanwha Systems surged 29% on Tuesday before retreating 6.35% and 20.93% on Wednesday. Semiconductor giants tumbled, with Samsung Electronics down 11.74% to 172,200 won and SK hynix falling 9.58% to 849,000 won. Airlines faced pressure from rising oil prices, with Korean Air declining an additional 7.94%.
Retail investors were divided, as seen in posts on the anonymous forum Blind. One user advised, “Investing is so simple. This month, I should sell all my semiconductor stocks and just buy defense and oil shares,” claiming gains from the shift. Another lamented, “As soon as I bought SK hynix, war broke out.” A 33-year-old Seoul office worker added funds to Samsung Electronics, betting on a rebound.
Analysts noted prolonged risks. Eugene Investment & Securities researcher Huh Jae-hwan said, “Iran’s last-ditch resistance... could last longer than expected and add to the fundamental risk of an energy shock.” Daishin Securities' Lee Kyung-min added, “A short-term correction is inevitable... but there remains room for further gains if rate cuts and expansionary fiscal policies... begin to take effect.”
Prior to the rout, the KOSPI had risen 48.1%, the world's fastest, but the sharp correction has hit it harder than Asian peers.
