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KOSPI Slips Below 7,000 as Middle East Tensions Drive Up Yields and Inflation Fears
Electronic Technology · Semiconductors · yonhap_finance · 2026-09-11
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South Korean markets face volatility as prolonged US-Iran tensions spike oil prices, pushing KOSPI lower and sending 3-year government bond yields above 4%.
What Happened
Market Volatility: The prolonged conflict between the U.S. and Iran has triggered significant market instability, fueled by supply chain disruptions and surging oil prices. Consequently, the KOSPI index retreated, falling below the 7,000-point threshold amid heavy selling by foreign and institutional investors.
Macroeconomic Headwinds: Brent and WTI crude prices exceeding $100 per barrel have heightened inflation concerns, placing downward pressure on equities. With major central banks signaling further interest rate hikes, the global liquidity environment has become increasingly unfavorable for risk assets.
Bond Market Sell-off: Government bond yields hit new annual highs across most maturities, with the 3-year yield surpassing 4% for the first time in three years. Rising U.S. Treasury yields and domestic fiscal concerns have accelerated the sell-off in the local fixed-income market.
Currency and Outlook: The KRW/USD exchange rate climbed to the 1,345 level as the dollar index rebounded. Market participants are now closely monitoring upcoming U.S. inflation data and Federal Reserve policy meetings to gauge the future direction of the financial markets.
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