South Korea’s equity market has recorded the steepest decline in its history as the widening fallout from the US-Israeli war on Iran rippled across global financial markets.

According to multiple local sources, the benchmark KOSPI index fell as much as 12.06% on March 4, surpassing the previous record one-day drop of 12.02% which was triggered by the September 11, World Trade Centre attacks of 2001. While the index later clawed back some losses, it still remained down about 10% by the close.

South Korean financial authorities had earlier in the day activated a 20-minute ‘circuit breaker’ after losses moved past the 8% - a threshold used in Seoul to suspend trading on the exchange for a time.

The latest plunge followed a 7.2% decline in the KOSPI a day prior, thereby sealing the market’s worst two-day performance in years.

Selling pressure was based across many sectors, affecting a number of blue-chip names including Samsung Electronics, SK Hynix and LG Electronics.

At the same time with the global shipping and logistics sector taking a hit because of the war, South Korean shipping groups were among the hardest hit. Shares in Pan Ocean, HMM and KSS Line all tumbled between 16% and 17%.

As a nation heavily dependent on imported energy, with an estimated 98% of its fossil fuel requirements sourced from overseas, the effect on the stock market had almost been expected, but the abrupt reversal comes after a buoyant start to the year. The KOSPI had surged more than 40% in the first two months of 2026, significantly outpacing most major international peers.