South Korea’s Kospi plunged on Wednesday to record its worst single-day decline, extending a steep sell-off from the previous session amid a broader fall in Asia markets as an escalating war in the Middle East dents investor sentiment.
In Japan, the Nikkei 225 fell another 2 ,033.51 points, or 3.6%, to 54,245.54
In Hong Kong, the Hang Seng docked 518.6 points, or 2%, to 25,249.48
In Korea, the Kospi slumped 698.37 points, or 12.1%, to 5,093.54, with heavyweights SK Hynix and Samsung Electronics falling about 10% and nearly 12%, respectively.
The South Korean market had been on a tear last year, soaring more than 75%, and extended gains into the new year as well, with the Kospi hitting fresh highs on the back of semiconductor heavyweights that have seen their shares surge on strong memory chip demand.
The Korea Exchange temporarily halted trading for the Kospi index on Wednesday. A circuit breaker was activated on the Kosdaq as well, which closed 14% lower at 978.44.
Additionally, South Korea’s stock market is particularly sensitive to swings in oil prices, meaning geopolitical shocks in the Middle East tend to trigger short-term volatility, said one expert.
As a major oil importer, Korea’s manufacturing-heavy economy is vulnerable to rising energy costs, which can pressure industrial and export-oriented sectors when crude prices spike.
South Korea’s net oil imports are 2.7% of its gross domestic product, with Nomura flagging it among the most vulnerable to current account pressures.
CHINA
In China, the CSI 300 dropped 53.27 points, or 1.1%, to 4,602.63.
Investors in the region will also be watching an annual parliamentary meeting by China’s policymakers that kicks off later in the day.
The gathering, dubbed the “Two Sessions,” consists of a consultative congress that will start later in the day, and a National People’s Congress due to open Thursday. Chinese Premier Li Qiang is set to announce a series of economic targets at the NPC, which had largely been decided at a December meeting.
China’s factory activity faltered in February as manufacturers paused production and cargo shipments to celebrate an extended holiday, an official survey showed on Wednesday.
The official manufacturing purchasing managers index fell to 49 in February, according to the National Bureau of Statistics, missing economists’ forecast for 49.1.
In other markets
In Singapore, the Straits Times Index folded 103.9 points, or 2.1%, to 4,812.75.
In Taiwan, the Taiex index surrendered 1,494.77 points, or 4.4%, to 32,828.88.
In Australia, the ASX collapsed 176.06 points, or 1.9%, to 8,901.21.
In New Zealand, the NZX 50 lost 89.09 points, or 0.7%, to 13,531.12.
