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KOSPI Plunges Over 3% Amid Escalating Middle East Tensions
Electronic Technology · Semiconductors · yonhap_finance · 2026-09-02
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The KOSPI index dropped more than 3% as geopolitical instability in the Middle East triggered a sell-off by foreign and institutional investors.
What Happened
Market Downturn: Escalating military tensions in the Middle East have rattled global markets, leading to a decline in U.S. indices and a surge in oil prices and bond yields. This macro-level uncertainty has exerted significant downward pressure on the South Korean stock market.
Investor Sentiment: Foreign and institutional investors are leading the sell-off, offloading nearly 2 trillion won in shares. Conversely, retail investors are attempting to support the market through dip-buying, bolstered by corporate share buyback programs from major tech firms.
Sector Performance: Large-cap stocks, particularly in the semiconductor and battery sectors, are experiencing heavy losses. In contrast, banking stocks are showing resilience, benefiting from the rising interest rate environment, creating a distinct divergence in sector performance.
KOSDAQ Volatility: The KOSDAQ index faced significant volatility, briefly testing the 800-point level. While battery-related stocks remain under pressure, some biotechnology and semiconductor equipment firms have managed to pivot to positive territory, helping to mitigate the overall decline.