Iran war sends Korean stocks tumbling 12%

South Korean shares sank 12% on Wednesday, posting the biggest drop in their 46-year history and wiping half a trillion dollars in value just this week, as fears that the Iran war could cripple Asia's fourth-largest economy sent the won to a 17-year low.

Israeli and US forces continued attacking Iran, prompting retaliatory attacks around the Gulf as the conflict spread to Lebanon, rattled global markets and sent oil prices sharply higher.

Losses in the country's stocks far outweighed those seen elsewhere in Asia as the Iran conflict heightened risks for economies like South Korea, which are heavily reliant on Middle Eastern oil for their energy needs.

South Korea is the world's fourth-largest buyer of oil, and around 70% of its purchases come from the Middle East.

Korean equities had been Asia's best-performing, having doubled over the past year, making them particularly vulnerable to a capitulation, traders said.

The benchmark KOSPI fell 698.37 points, or 12.06%, to close at 5,093.54, marking the biggest ?daily percentage loss in its history dating back to 1980. It lost as much as 12.65% during the session.

On the index, circuit breakers were activated for the first time since August 2024, halting trading for 20 minutes. A separate trading curb was previously triggered for the second day in a row to halt programme trading for five minutes, but failed to cap the decline.