The Korean stock exchange was forced to suspend trading after the conflict in the Middle East escalated.
South Korea’s Kospi and Kosdaq each fell more than 10% in early morning trade in Seoul, sparking a power outage, as the indices saw their worst session since August 2024, Channel News Asia reported on Wednesday.
Japanese stock markets also suffered heavy losses on Wednesday, with the Nikkei and Topix both down around 4%. Meanwhile, Hong Kong’s Hang Seng index fell 3% and China’s Shanghai Composite index fell 1.3%, according to Google Finance.
“Investors sold riskier assets, and in particular, the Nikkei as well as the Kospi, which outperformed other major indices, became the target of heavier selling as they tried to book profits,” Kazuaki Shimada, chief strategist at IwaiCosmo Securities, told CNA.
“South Korea imports 94% of its oil and 75% from the Middle East. So it’s easy to see why its ‘degens’ are panicking,” said Bianco Research CEO Jim Bianco.
Thailand, another Middle Eastern oil importer, shed 7.8% on Wednesday.
Wars can be fought forever, says Trump
The Trump administration said attacks on Iran are escalating and the US is targeting a meeting of the country’s top leaders as they decide who will lead, Fox News reported Wednesday.
The move follows the closure of the Strait of Hormuz following threats by Iran to target oil and cargo ships crossing the vital waterway.
“If necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz as soon as possible,” Donald Trump said on Social Truth.
On Tuesday, he said the US has a “virtually unlimited supply” of weapons and that wars could be fought “forever”.
related to: Middle East tensions boost gold as investors seek safe havens
As a result, crude oil prices rose sharply, with Brent crude up 14% to $82 a barrel and WTI crude up 12% to $75 a barrel since the airstrikes began on February 28, according to OilPrice.
A cryptographic researcher says that a black swan event is happening
Crypto researcher SungHun Lee called it a black swan event, explaining that trading in Korea was halted “because the crash was too fast for the system to handle,” noting that $3.2 trillion in global stock market value had evaporated in the past four days.
“This is not just a war. This is the WORST geopolitical shock since 1973,” referring to the oil crisis that devastated markets for two years in the 1970s.
Crypto asset markets, which have already lost 21% so far this year, didn’t react as strongly, with capitalization down just 0.5% on the day to $2.39 trillion, according to CoinGecko.
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