The benchmark index plummets as much as 12.2 percent, eclipsing the single-day drop after the Sept. 11, 2001, attacks.
Published March 4, 2026
South Korea’s stock market has suffered one of the steepest declines in history amid the growing fallout from the US and Israel’s war on Iran.
The benchmark KOSPI index plunged as much as 12.2 percent on Wednesday, eclipsing the 12.02 percent single-day drop caused by the Sept. 11, 2001, attacks on the United States and the 9.44 percent drop seen at the height of the 2008 financial crisis.
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The index recovered some losses in the afternoon and was down about 10 percent at 0500 GMT.
South Korean financial authorities had earlier activated their 20-minute circuit breaker after losses exceeded the 8 percent threshold to trigger a suspension of trading on the stock market.
The drop followed a 7.2 percent drop in the KOSPI on Tuesday, consolidating the worst two-day streak in decades.
The losses spread across the board, affecting corporate giants such as Samsung Electronics, SK Hynix and LG Electronics.
But transport and logistics companies suffered the greatest losses amid the effective paralysis of traffic through the Strait of Hormuz, through which around a fifth of the oil consumed worldwide circulates.
Shares of Pan Ocean, HMM and KSS Line plunged 17 to 19 percent.
South Korea’s stock market is off to an explosive start to 2026, with the KOSPI gaining more than 40 percent in the first two months of the year, far outperforming its international peers.
The market collapse is the latest example of the economic shocks unleashed by the conflict in the Middle East.
U.S. stocks fell overnight, with the benchmark S&P500 index and the tech-heavy Nasdaq Composite falling about 1 percent after Wall Street downplayed the conflict in the previous session.
The United States and Israel continued bombing Iran and Lebanon overnight as the war entered its fifth day, while Tehran launched attacks against Israel and US allies in the Gulf region, including Qatar and the United Arab Emirates.
