Asian shares swoon and Kospi sinks 12%, as the war with Iran widens and oil surges higher

On Wednesday, March 4, 2026, Asian shares experienced a significant downturn, with the Kospi index in South Korea plummeting by 12%. This market decline occurred as the war with Iran escalated, contributing to a surge in oil prices. The stock decline was observed across Asia, with images from Tokyo and Seoul showing the impact on stock boards and trading activity. Dealers were seen monitoring the situation in real-time, particularly the Kospi and the exchange rate between the U.S. dollar and the South Korean won. The widening conflict with Iran is the likely cause for the economic downturn.

On March 4, 2026, South Korea's KOSPI stock market index experienced a significant drop, plummeting as much as 12.2 percent due to the escalating US-Israeli conflict with Iran. This decline surpassed the market's reaction to the 9/11 attacks. Trading was temporarily halted after losses exceeded 8 percent, triggering a circuit breaker. The market's downturn was broad, impacting major corporations like Samsung and LG, with shipping and logistics companies suffering the most due to disruptions in oil transport through the Strait of Hormuz. South Korea's heavy reliance on foreign oil and gas contributed to investor anxiety. This sharp decline follows a period of strong growth for the KOSPI in early 2026.