South Korea's Kospi Slumps 7%, Asia-Pacific Stock Markets Darken on Middle East Conflict

Jakarta, CNBC Indonesia - The South Korea Kospi index fell 7.24% on Wednesday (4 March 2026), extending the sharp sell-off from the previous day when the index posted its worst decline in 19 months amid escalating fighting in the Middle East.

Investors in the Asia-Pacific region will also be watching the annual parliamentary meetings of Chinese policymakers that begin on that day. The meetings, known as the ‘Two Sessions’, consist of the Chinese People’s Political Consultative Conference, which will begin today, and the National People’s Congress, which will be opened on Thursday. Chinese Premier Li Qiang will announce a series of economic targets at the National People’s Congress, most of which were decided at the December meeting.

Australia’s S&P/ASX 200 index started the day down 1.81%. Japan’s Nikkei 225 shed 1.59%, while the Topix dropped 1.61%.

Hang Seng index futures were at 25,448, below the benchmark’s last close of 25,768.08.

Oil prices continued to rise with US crude futures up 0.87% to $75.21 a barrel, while Brent crude rose 5.43% to $81.96 per barrel amid the widening conflict, with Iran moving to close the Strait of Hormuz.

A senior commander of Iran’s Islamic Revolutionary Guard Corps said on Monday that the critical waterway had been closed and warned that any vessel attempting to traverse the channel would be targeted, according to Iranian media.

US President Donald Trump said on Tuesday afternoon that the US Navy would escort tanker ships through the Strait of Hormuz if necessary.

“Whatever happens, the United States will ensure free energy flows to the world,” he said in a Truth Social post. “The economic and military might of the United States is the greatest on earth - further action will follow.”

Last night in the US, the stock market experienced another volatile session as concerns about the protracted US-Iran conflict rattled markets.

The Dow Jones Industrial Average fell 403.51 points, or 0.83%, to finish at 48,501.27. The S&P 500 declined 0.94% to 6,816.63, while the Nasdaq Composite dropped 1.02% to 22,516.69. At one point, the S&P 500 was down 2.5% and the Nasdaq around 2.7%. The Dow Jones Industrial Average, comprised of 30 stocks, fell more than 1,200 points, or about 2.6%, at its low.