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Kospi endures worst two-day collapse since 2008

ended 04. March 2026

Panic selling swept across Asian stock markets overnight as the war between the US, Israel and Iran intensified.

Trading on South Korea’s benchmark index was temporarily halted as it suffered losses of more than 12pc.

It meant the Kospi, as it is known, has endured its worst two-day collapse since 2008 during the global financial crisis.

Oil prices climbed a further 2pc to more than $83 a barrel after Israel launched a fresh wave of strikes against Iran and Hezbollah in Lebanon.

Tech giants like Samsung and SK Hynix, which had performed strongly so far this year, fell heavily as the conflict threatened a surge in energy prices. They were down by 11.7pc and 9.6pc, respectively.

Stocks were hit hard in Japan, which depends heavily on imports of oil and natural gas from the Persian Gulf. Its benchmark Nikkei 225 declined by 3.6pc.

  • What does this say about the global economy?
  • How will this affect the UK economy?
  • What are your predictions for the rest of the week?

Responses asap.

3 responses from the Newspage community

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Editor
Riz Malik
Independent Financial Adviser at R3 Wealth
Asia is right to be uneasy about the risk of an energy shock. With no clear plan or roadmap from the US President on how these hostilities might end, markets are left guessing. If oil and gas prices keep climbing, the pressure will not stop at Asia. European and US markets will also start pricing in the risk of a longer conflict. Reports of Iran reaching out to Washington over the weekend raised hopes briefly, but recent rhetoric suggests a quick resolution remains unlikely.
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Editor
Samuel Mather-Holgate
Managing Director & IFA at Mather and Murray Financial
Iran is the catalyst here, but an over-hyped AI bubble is the real reason for the sell off. Once the Iranian conflict is resolved one way or another there won't be a bounce back in the KOSPI or other AI stocks, like there will be in other sectors. Physiologically, investors needed a kick to take profits, and this was it.
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Rohit Parmar-Mistry
Founder at Pattrn Data
This is not a Korea story. It is a reminder that geopolitics is back in the pricing model. When markets move 10 plus per cent in two days, it is usually less about fundamentals and more about forced de risk: leverage unwinds, risk limits trip, and everyone heads for cash at once.

The UK impact is likely to come via energy and confidence. A sustained oil move pushes inflation expectations up, squeezes consumers, and makes rate cuts harder. It also hits firms with fragile supply chains, especially anything energy intensive, transport heavy, or dependent on imported components.

For the rest of the week, watch oil, shipping insurance, and credit spreads more than equities. If those stabilise, the bounce can be sharp. If they keep widening, expect more circuit breakers, more “safe haven” rotation, and more pain in growth and tech.