Korean Stocks Sink as Global Funds Sell on Iran War Risks

at the Korea Exchange (KRX) in Seoul, South Korea, on Wednesday, March 4, 2026. Panic swept across trading desks in South Korea as local stocks, by far the hottest in the world over the past year, extended their freefall into Wednesday. Photographer: SeongJoon Cho/Bloomberg Photo by SeongJoon Cho /BloombergArticle content(Bloomberg) — South Korean equities fell as escalating Middle East tensions and rising oil prices prompted investors to further reduce risk exposure. Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe Kospi plunged more than 8% on Monday, after sinking by 11% last week, to lead losses in Asia. Chip heavyweights Samsung Electronics Co. and SK Hynix Inc. were again the biggest drags on the benchmark index, declining more than 10% each.

The Korea Exchange halted trading on Kospi shares for 20 minutes following the slide. Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentThe Iran war has impacted Asian stocks disproportionately, partly because of the region’s outsize reliance on fuel shipments through the Strait of Hormuz. Korean stocks continue to bear the brunt of the selloff, as investors take profits from the artificial intelligence boom that drove big gains in tech shares. Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“It’s another ugly day for Korean stocks, as investors worry the Iran conflict may last longer than expected,” said Jung In Yun, chief executive officer at Fibonacci Asset Management Global. “Reducing exposure is the most prudent call for now. It will be tactical only. I think many will be eyeing the timing to get back in.”Article contentForeign funds offloaded more than 1 trillion won ($668 million) of Kospi stocks on a net basis Monday morning, after shedding 14 trillion won last week. Retail investors were buyers for the day. Article contentThe surge in oil prices has been a major concern for traders amid the ongoing war, given the potential for higher inflation. Crude’s jump above $100 a barrel raises the specter of cost increases in Korea, a net importer of energy.Article contentWhile tech stocks have tumbled on the risk-off trade, energy shares have outperformed.

Daesung Energy Co. jumped more than 20% Monday. Article contentArticle contentThe won weakened 0.7% against the US dollar. The three-government bond yield jumped 20 basis points. Traders are now pricing in about 50 basis points of tightening by the Bank of Korea over the next 12 months, up from about 25 basis points expected at the end of last month, according to data compiled by Bloomberg.Article contentSelloff RiskArticle contentThe Kospi is still up more than 20% this year, beating most global stock indexes. Investors had piled into Samsung and SK Hynix on the voracious need for their memory chips as the global AI buildout continues.Article contentThe huge runup made Korean stocks particularly vulnerable to the selloff that has built since the US and Israeli attacks on Iran more than a week ago. Losses have been exacerbated by a record build-up of borrowings to finance purchases of Korean equity ahead of the conflict.Article contentIndividual traders have been a bright spot among the recent market swoon, continuing to return to the local market after years of investing much of their cash overseas. Still, the prospect of forced liquidations is a concern — outstanding margin loans climbed to more than 33 trillion won as of Thursday, continuing to rise even after Iran risks shook markets. Article content“While inflation concerns are becoming more serious, a further decline in stocks is also likely to raise the odds retail margin calls,” said Shawn Oh, head of Korea cash equities at NH Investment & Securities in Seoul. “The overall mood is quite pessimistic.”Article content—With assistance from Susie Kang.Article contentTrending Here are 5 things worried investors can do as the Iran war plays out Investor Garry Marr: Why your house is still costing you, even if you've paid it off Personal Finance These eight charts show 'rupture' with Canada under Trump's tariffs Economy Gold Slumps as Oil Surge Stokes Fears of Higher Interest Rates PMN Business Korean Stocks Sink as Global Funds Sell on Iran War Risks PMN Business Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Here are 5 things worried investors can do as the Iran war plays out Investor Garry Marr: Why your house is still costing you, even if you've paid it off Personal Finance These eight charts show 'rupture' with Canada under Trump's tariffs Economy Gold Slumps as Oil Surge Stokes Fears of Higher Interest Rates PMN Business Korean Stocks Sink as Global Funds Sell on Iran War Risks PMN Business