The South Korean stock market hit a massive roadblock today, March 4, 2026, as the KOSPI and KOSDAQ indices both crashed by more than 8%, triggering automatic circuit breakers that halted trading for 20 minutes.
The sell-off continued after trading resumed, with the KOSPI plunging as much as 12.6% by early afternoon.
Key Market Drivers
Geopolitical Conflict: Markets were rattled by the escalating US-Iran military conflict, specifically reports of coordinated US and Israeli strikes in the region.
Energy Security: As a major oil importer, South Korea is highly vulnerable to supply disruptions and surging energy costs caused by the closure of the Strait of Hormuz.
Currency Crash: The Korean won weakened sharply, hitting a 17-year low and breaking the 1,500 per dollar barrier.
Foreign Capital Flight: Foreign investors led the exodus, dumping nearly $800 million (1.2 trillion won) worth of shares in the morning session alone.