KOSPI, affected by geopolitical turmoil, records the largest decline in history... 5100-point support line collapses

South Korea’s KOSPI Index hit a record low on March 4, 2026, falling below 5,100 points. This was due to the escalation of geopolitical tensions caused by the outbreak of the US-Iran war, leading to increased market anxiety.

On that day, the KOSPI closed at 5,093.54 points, down 698.37 points from the previous trading day. This marked the largest point and percentage decline in history, reflected in a record surge in the market volatility index—KOSPI 200 Volatility Index. Notably, the Korean won against the US dollar also appreciated by 10.1 won, closing at 1,476.2 won, indicating instability in the currency market.

Additionally, the Korea KOSDAQ Index dropped 159.26 points, approximately 14%, closing at 978.44 points. This sharp decline triggered the suspension of program trading, further dampening trading activity. The situation, driven by geopolitical instability in the Middle East, has had a significant impact on Korea’s economy and stock market.

The sharp decline in the domestic stock market is a sensitive response to Korea’s heavy reliance on Middle Eastern oil and the subsequent rise in oil prices. As Iran blockades the Strait of Hormuz, international oil prices soar, heightening concerns over inflation and economic slowdown. Amid global stock market instability, Korea has been more severely affected than other countries.

Looking ahead, such market fluctuations are likely to continue. If the prices of key raw materials like oil keep rising, it could lead to deteriorating corporate performance and cause serious disruptions to the overall economy. Therefore, close monitoring of international developments and raw material markets is essential.