South Korea's Kospi Index Plunges, Trading Halted

Asian Markets Slide as Middle East Tensions Escalate, Oil Surges Above $100​

Asian equity markets fell sharply on Monday, March 9, as escalating tensions in the Middle East and a sharp rise in crude oil prices prompted investors to cut risk exposure across global markets.

The selloff was led by South Korean and Japanese equities, while investors shifted toward safe-haven assets such as the US dollar amid heightened geopolitical uncertainty.

South Korean Stocks Plunge, Circuit Breakers Triggered​

South Korea’s Kospi index declined by more than 8% on Monday after dropping 11% last week, reflecting heavy selling pressure in technology stocks.

Major companies such as Samsung Electronics and SK Hynix were among the biggest drags on the benchmark, each falling more than 8% during the session.

The sharp fall in the Kospi triggered circuit breakers, resulting in a 20-minute halt in trading. This marks the second time circuit breakers have been activated in the South Korean market this month.

Japanese Equities Decline Sharply​

Japanese stocks also registered significant losses during early trading in Tokyo.

The Topix index dropped 4.7% to 3,541.55 as of 9:11 am, while the Nikkei index fell 5.1% to 52,780.7.

The decline in Asian equities comes as the ongoing conflict between Iran and Israel continues to weigh on investor sentiment, particularly due to Asia’s heavy reliance on fuel shipments through the Strait of Hormuz.

Oil Surge Adds Pressure to Global Markets​

Crude oil prices climbed above $100 per barrel for the first time since 2022, intensifying concerns about global economic stability.

Brent crude rose about 17% to around $108 per barrel after already surging 28% last week. Oil markets are facing increased volatility as the conflict involving Iran enters its second week.

Shipping through the Strait of Hormuz, a critical route for global oil supplies, has effectively halted, while major producers have begun reducing output.

The disruption has clogged exports from the Persian Gulf region, one of the world's largest oil-producing areas.

Safe-Haven Demand Lifts the Dollar​

Amid the heightened geopolitical risk, investors moved toward safer assets.

The Bloomberg Dollar Spot Index rose 0.5% on Monday as the US dollar strengthened against most major currencies. Asian shares fell about 1.8% at the open, while futures for the Nasdaq 100 Index dropped as much as 2%.

Treasury yields also moved higher, with the yield on the benchmark 10-year US Treasury rising to 4.18%.

Precious Metals Decline Despite Global Tensions​

Gold and silver prices fell even as geopolitical tensions intensified.

The decline was linked to rising inflation concerns, which have increased expectations that the US Federal Reserve could keep interest rates elevated for longer or potentially raise them further.

Meanwhile, Australian three-year bond yields climbed to their highest level since July 2011.

Middle East Conflict Intensifies​

The conflict in the Middle East continued to escalate during the weekend.

Iran launched further attacks on neighboring countries, while Israel targeted fuel depots in Tehran and warned it could strike Iran’s power grid.

US President Donald Trump said the United States could consider targeting additional locations and stated that attacks would continue until Iran either surrendered or collapsed.

Meanwhile, Iran appointed Mojtaba Khamenei, the son of the late Ayatollah Ali Khamenei, as the country’s new supreme leader.

Oil Supply Disruptions Deepen​

Oil supply concerns have intensified as countries in the region respond to the crisis.

The United Arab Emirates and Kuwait have begun reducing oil production, while the near closure of the Strait of Hormuz continues to disrupt shipments through the crucial waterway linking the Persian Gulf to global markets.

US Labour Market Shows Signs of Weakness​

In the United States, recent economic data added to market uncertainty.

Nonfarm payrolls declined by 92,000 last month, marking one of the steepest drops since the pandemic. The unemployment rate rose to 4.4% as job cuts spread across multiple industries.

Market volatility also surged. The Cboe Volatility Index, widely known as the VIX, jumped toward 30 on Friday, reflecting rising expectations of large swings in US equities.