Middle East Conflict Shocks Global Markets: Korean Stock Market Plunges 10% Triggering Circuit Breaker, Bitcoin Resists Decline Draws Attention

March 4 News: The ongoing tensions in the Middle East have triggered intense fluctuations in the global financial markets. On Wednesday, the Korean stock market experienced a significant sell-off, with the KOSPI and KOSDAQ indices both plunging over 10% during Seoul’s morning trading, triggering market circuit breakers and halting trading. This decline marks the most severe single-day drop since August 2024, indicating that geopolitical risks are rapidly spreading to Asian capital markets.

The sell-off was not limited to Korea. Japan’s stock market also came under pressure, with the Nikkei and Topix indices falling nearly 4% intraday. Meanwhile, Hong Kong’s Hang Seng Index declined about 3%, and China’s Shanghai Composite Index retreated 1.3%. Analysts believe investors are quickly reducing risk exposure to cope with rising energy and inflation risks caused by the escalation of Middle East conflicts.

Kazuaki Shimada, Chief Strategist at IwaiCosmo Securities, stated that some major Asian stock indices had previously performed strongly, making them prime targets for profit-taking amid rising panic. Jim Bianco, CEO of Bianco Research, pointed out that Korea is highly dependent on imported energy, with about 94% of its oil supply coming from overseas, and 75% from the Middle East. Therefore, the potential risks in the Strait of Hormuz directly impact market confidence in Korea.

Concerns over energy supply have driven crude oil prices higher. Data shows that since the airstrikes began on February 28, Brent crude has risen about 14% to $82 per barrel, and WTI crude has increased 12% to around $75. The rising energy prices further intensify fears of a global inflation resurgence.

Meanwhile, U.S. President Trump stated on social media that the U.S. Navy might escort oil tankers through the Strait of Hormuz and claimed that the U.S. has “almost unlimited weapon supplies,” suggesting that the conflict could “continue for a long time.” This statement has further heightened market concerns over the escalation of the conflict.

Cryptocurrency markets have remained relatively stable. Researcher SungHoon Lee described the current situation as a “black swan event” and noted that global stock market capitalization has evaporated by approximately $3.2 trillion over the past four days. However, compared to traditional markets, crypto market volatility has been relatively moderate, with overall digital asset market cap declining only about 0.5% on the day to $2.39 trillion.

Market observers believe that amid the turbulence in global equities and soaring energy prices, the resilience of cryptocurrencies like Bitcoin has once again attracted investor attention. Some funds are reassessing the safe-haven role of digital assets amid geopolitical risks.