Global energy markets remained volatile as tensions centered on the Strait of Hormuz — a critical artery for global oil shipments — fueled fears of supply disruptions and renewed inflation pressure. The narrow waterway carries roughly one-fifth of the world’s seaborne crude and serves as a key route for energy supplies bound for Asia.
U.S. President Donald Trump said Washington was prepared to intervene to protect shipping lanes in the region.
“If necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz,” Trump said, adding that the government would also provide political risk insurance for maritime trade to ensure the “free flow of energy to the world.”
The war abruptly ended this year’s fastest and steepest rally in Korean equities, sending stocks tumbling for a second consecutive session in one of the sharpest market collapses in decades.
The benchmark KOSPI plunged 12.06 percent, or 698.37 points, to close at 5,093.54, after already falling 7.24 percent the previous day. The two-day slide wiped out nearly 19 percent of the index’s value.
The index briefly dropped to an intraday low of 5,059.45 before closing near session lows, pushing the market back toward levels seen earlier this year.
The scale of the decline was extraordinary by historical standards. The drop surpassed the 12.02 percent plunge recorded on Sept. 12, 2001, in the aftermath of the Sept. 11 attacks, when the KOSPI fell 64.97 points to close at 475.64. The latest selloff therefore ranks among the steepest single-day declines in the history of the Korean stock market.
Selling pressure intensified shortly after the open. The index began the session 3.44 percent lower at 5,592.59, before losses rapidly accelerated across the board.
According to the Korea Exchange, circuit breakers were triggered as the selloff deepened. Trading was halted on the KOSDAQ at 11:16:33 a.m., followed by the KOSPI at 11:19:12 a.m., after both indices fell more than 8 percent from the previous close.
The mechanism halted trading for 20 minutes in an effort to curb panic selling. It marked the seventh circuit breaker in KOSPI history and the eleventh for the KOSDAQ, and the first such halt since Aug. 5, 2024.
Trading activity surged as volatility intensified. Turnover on the KOSPI jumped to about 62.6 trillion won ($42.6 billion), sharply higher than 52.8 trillion won the previous day.
Losses were widespread across the Korean market, with major exporters and technology firms leading the decline.
Samsung Electronics dropped 11.74 percent to 172,200 won, while SK hynix fell 9.58 percent to 848,000 won, extending losses from the previous session.
Automakers and industrial stocks also suffered steep declines.
Hyundai Motor plunged 15.8 percent, Kia slid 14.04 percent, and LG Energy Solution fell 11.58 percent.
Heavy industry and shipbuilding shares were similarly hit, with HD Hyundai Heavy Industries dropping 13.39 percent.
Even defense stocks — which had surged a day earlier amid rising geopolitical tensions — reversed sharply. Hanwha Aerospace, Hyundai Rotem, and Hanwha Systems all posted significant losses.
The tech-heavy KOSDAQ also recorded a historic decline.
The index plunged 14 percent, or 159.26 points, to 978.44, breaking below the psychologically important 1,000 level after opening at 1,112.08.
Major growth stocks fell sharply across the board, including EcoPro, Alteogen, EcoPro BM, Samchundang Pharm, and Rainbow Robotics, all posting double-digit losses.
Elsewhere in Asia, markets also declined as investors moved away from risk assets, though the scale of losses was far less severe than in Korea.
Japan’s Nikkei 225 fell 3.6 percent to 54,245.5, while the broader TOPIX dropped 3.7 percent.
In Greater China, declines were more moderate.
Hong Kong’s Hang Seng Index fell 2.3 percent, while the Shanghai Composite slipped 1 percent.
The comparison underscored the magnitude of Korea’s selloff, which far exceeded declines across other major Asian markets.
Currency markets also reflected growing risk aversion.
The Korean won traded near crisis-era levels at 1,476.2 per dollar, highlighting investor concerns about capital outflows and rising energy costs.
With tensions in the Middle East unresolved and energy markets highly sensitive to developments around the Strait of Hormuz, volatility across global markets is likely to remain elevated.
Market watchers note that after surging nearly 50 percent this year as of last week, the KOSPI may still face further downside risks if geopolitical tensions persist.
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