SEOUL, March 09 (AJP) - Asian stock markets fell sharply Monday as surging oil prices and escalating tensions in the Middle East triggered a broad risk selloff across the region, with Korea and Japan among the hardest hit.
Korea’s benchmark KOSPI closed at 5,251.9, down 6 percent, after plunging more than 8 percent throughout the trading session and briefly falling to 5,096.2. The sharp drop triggered a Level-1 circuit breaker, temporarily halting trading for 20 minutes.
Japan’s Nikkei 225 fell 5.2 percent to 52,728.72, while Hong Kong’s Hang Seng Index declined 1.84 percent to 25,282.5. China’s Shanghai Composite slipped 0.7 percent to 4,096.02, reflecting broader risk aversion across regional markets.
Circuit breaker and sidecar triggered in Korea
Market safeguards were activated as selling pressure intensified in Seoul.
The Korea Exchange triggered a sell-side sidecar at 9:06 a.m. (0006 GMT) after program-driven selling accelerated in both the KOSPI and KOSDAQ markets.
Later at 10:31 a.m., a Level-1 circuit breaker was triggered on the KOSPI, halting all trading for 20 minutes after the index fell more than 8 percent throughout the session for over one minute.
It marked the second circuit breaker in just three trading sessions, underscoring the extreme volatility gripping Korean equities.
The tech-heavy KOSDAQ closed 4.5 percent lower at 1,102.3, after hitting a low of 1,067.24.
Foreign investors lead heavy selling
Foreign and institutional investors drove the sell-off in South Korea.
Foreign investors sold 3.18 trillion won ($2.3 billion) worth of shares on the KOSPI, as institutions followed by dumping 1.53 trillion won.
Retail investors stepped in as bargain hunters, buying 4.62 trillion won, helping the index recover from its session lows.
On the KOSDAQ market, foreigners sold 544.1 billion won, while individuals bought 517 billion won and institutions added 49.5 billion won.
Market heavyweights tumble
Major market heavyweights ended sharply lower.
Samsung Electronics fell 7.8 percent to 173,500 won, while SK hynix dropped 9.5 percent to 836,000 won.
Automakers also declined, with Hyundai Motor sliding 8.3 percent to 507,000 won.
Battery and biotech shares weakened as well. LG Energy Solution fell 4.8 percent to 359,500 won, while Samsung Biologics dropped 4 percent to 1,579,000 won.
Oil surge fuels market volatility
The market turmoil followed a sharp surge in oil prices amid fears of supply disruptions linked to escalating tensions in the Middle East.
West Texas Intermediate crude rose to $103.8 per barrel, up 13.8 percent, while Brent crude climbed to $107.5, gaining 16.1 percent.
The spike raised concerns that global inflation pressures could reaccelerate just as central banks were preparing to ease monetary policy.
Won weakens and bond yields surge
Currency and bond markets also reflected rising risk aversion.
The Korean won closed at 1,493.3 per dollar, up 8.3 won from the previous session and approaching the psychologically important 1,500 level.
The sell-off extended to the bond market.
The three-year Korean government bond yield rose 19.3 basis points to 3.420 percent, while the 10-year yield climbed 12.3 basis points to 3.739 percent.
Korea’s market hit harder than regional peers
Analysts said Korean equities tend to react more sharply to geopolitical shocks due to the country’s heavy dependence on Middle Eastern energy imports and the semiconductor-heavy structure of its stock market.
The surge in oil prices and renewed geopolitical uncertainty have heightened concerns about volatility across global financial markets.
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