Panic as South Korea’s inventory index plunges by 12% – the steepest drop in historical past

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Your assist makes all of the distinction. Learn extra South Korea's benchmark KOSPI inventory index plunged by over 12 per cent on Wednesday, marking its worst-ever sell-off.

The district referred to as the Korean Silicon Valley, usually bustling, fell eerily quiet throughout what would usually be the lunchtime rush.

Employees have been as a substitute hunched over smartphone screens, feverishly checking buying and selling portfolios. They watched because the world's once-hottest market, having doubled over the previous 12 months, went into freefall.

Jessica Chung, amongst many tapping intently on telephone screens in Pangyo, a high-tech hub south of Seoul, recounted the scene. "I heard a few of my colleagues gasping 'What the hell?' because the KOSPI's losses widened previous 8 per cent within the morning," she stated.

"I went to the toilet to discover a quiet nook to commerce and, guess what, individuals have been queuing exterior," she stated, describing the environment as a collective sense of dread.

<img src="https://static.independent.co.uk/2026/03/04/04/MERCADOS_MUNDIALES_27037.jpg" srcset="https://static.independent.co.uk/2026/03/04/04/MERCADOS_MUNDIALES_27037.jpg?quality=75&width=320&auto=webp 320w, https://static.independent.co.uk/2026/03/04/04/MERCADOS_MUNDIALES_27037.jpg?quality=75&width=640&auto=webp 640w" loading="lazy" alt="A man watches the KOSPI index in Seoul" class="sc-1mc30lb-0 ggpMaE inline-gallery-btn"/> open picture in gallery

A person watches the KOSPI index in Seoul (AP) The widening struggle within the Center East and ensuing spike in oil costs have triggered a rethink in regards to the AI increase that has pushed the KOSPI .KS11 to a succession of report peaks in current months, as a result of South Korea is nearly utterly reliant on imports for its vitality wants.

Chipmakers Samsung Electronics 005930.KS and SK Hynix 000660.KS - the poster youngsters of a rally that had accelerated this 12 months - have plunged some 20 per cent every this holiday-shortened week.

The KOSPI is down a mixed 18.4 per cent after Tuesday's 7.2 per cent tumble, wiping out a complete of 817.6 trillion gained ($553.82 billion) in market worth.

On Wednesday, of the KOSPI's complete 925 traded points, all however 14 fell.

And whereas the KOSPI's historic drop was triggering the primary circuit breakers since August 2024, the native forex was additionally reeling.

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The gained KRW= briefly weakened previous the psychologically key 1,500 mark towards the U.S. greenback in a single day for the primary time in 17 years.

In a nation of near 52 million individuals, South Korea has an estimated 14 million retail merchants - recognized domestically as "ants" - who make up a couple of third of day by day inventory buying and selling.

However analysts stated they weren't the first catalyst for the cascading sell-off.

"We're undoubtedly seeing overseas outflows driving the transfer, significantly within the large-cap tech names that had led the rally year-to-date," stated Tareck Horchani, head of Prime Brokerage Dealing at Maybank Securities in Singapore.

"Korea had been one of many strongest markets globally," he stated. "So positioning was crowded."

The rising threat of a drawn-out battle has specific significance for South Korea, the world's fourth-largest oil importer, which will get round 70 per cent of its oil from the Center East.

Nevertheless, there have been brilliant spots: Daesung Vitality 117580.KS, an LNG supplier, jumped by the day by day restrict of 30% after Iran introduced a blockade of the Strait of Hormuz.

Even so, not all shares acted as anticipated.

"Every thing is crimson for me immediately, however Hanwha Aerospace 012450.KS is the largest shocker," Chung stated, referring to the defence large's dramatic 8% drop on Wednesday following a 20 per cent bounce a day earlier on valuation issues.