KOSPI Briefly Breaches 6,000 as U.S.-Iran Conflict Rattles Markets

South Korean stocks plunged as the U.S. launched military operations against Iran, sending the KOSPI index briefly below the 6,000 mark in panic selling.

The KOSPI fell approximately 4% during trading, breaching the 6,000 level, while the KOSDAQ also declined. Unlike New York markets, which partially absorbed geopolitical risks with modest gains overnight, Korean markets showed vulnerability to heightened volatility.

According to Korea Exchange, the KOSPI stood at 5,987.15 as of 11:21 a.m. on the 3rd, down 256.98 points (4.12%) from the previous session. The index later recovered above 6,000 but remained down more than 3%. The KOSDAQ traded at 1,189.54, down 0.27%. The tech-heavy index had earlier hit a 52-week high of 1,215.67 before turning lower and giving up the 1,200 level.

Most top KOSPI stocks by market capitalization tumbled. Samsung Electronics and SK Hynix, the market's two largest companies, fell 4.39% and 5.00% respectively. Hyundai Motor dropped 6.68%, LG Energy Solution lost 4.33%, SK Square declined 4.50%, Samsung Biologics shed 3.71%, Kia plunged 7.88%, and Doosan Enerbility fell 3.86%. On the KOSDAQ, Ecopro dropped 3.62%, Alteogen lost 2.21%, Ecopro BM declined 3.39%, and Samchundang Pharmaceutical fell 1.45%.

Wall Street digested the heightened uncertainty overnight. The S&P 500 closed at 6,881.62, up 2.74 points (0.04%). The tech-heavy Nasdaq Composite rose 80.65 points (0.36%) to 22,748.86. The Dow Jones Industrial Average edged down 73.14 points (0.15%) to 48,904.78, posting a modest decline. Nvidia, the largest company by market cap, gained 2.99%, while Microsoft rose 1.48%, helping support the market. Energy companies including Exxon Mobil (up 1.13%) and Chevron (up 1.52%) closed higher on surging oil prices.

Asian markets mostly fell. Japan's Nikkei index dropped as much as 2.7% intraday before paring losses to close down 1.35%. Taiwan's TAIEX fell 0.9%. Hong Kong's Hang Seng Index declined more than 2%. Analysts say Asian markets, more vulnerable to volatility than U.S. markets, are bearing the full brunt of escalating geopolitical risks, as evidenced by Korean stocks turning sharply lower.