Market Anxiety Persists Amid U.S.-Iran Conflict
Foreign and Institutional Investors Show Early Net Buying
The KOSPI index took a sharp hit from Middle East geopolitical risks, including concerns about a full-scale war between the US and Iran, opening with a decline of over 4% on the 4th. The index is displayed on the status board of the Hana Bank dealing room in Jung-gu, Seoul. The KOSPI index triggered a sell-sidecar for the second consecutive day. March 4, 2026. Photo by Dongju Yoon
On March 4, the KOSPI opened with a drop of more than 3% compared to the previous day. The decline was so steep that a sell-sidecar (a temporary suspension of program sell orders) was triggered immediately after the market opened, after which the index showed a slight recovery.
On this day, the KOSPI started at 5,592.59, down 3.44% from the previous day. By 9:05 a.m., it had fallen by more than 6%, hitting 5,438.97. At around 9:06 a.m., the KOSPI 200 futures index plummeted, activating a sell-sidecar for the second consecutive day. The sell-sidecar is triggered when the KOSPI 200 futures index falls by 5% or more and the drop is sustained for one minute. Subsequently, as of 9:36 a.m., the index recorded 5,537.35, down 4.40% from the previous day.
As the war between the United States and Iran heightened geopolitical tensions in the Middle East, fear continued to dominate the market. Concerns over Iran potentially blocking the Strait of Hormuz drove international oil prices (WTI) up 4.7% to $74.56, increasing fears of a reignition of global inflation. All three major U.S. stock indices closed lower, and overnight, the won-dollar exchange rate surpassed 1,500 won.
Despite having sold record amounts up until the previous day, foreign investors showed net buying at the start of the session. On this day, foreign investors and institutions recorded net purchases of 119.7 billion won and 698 billion won, respectively. Individuals recorded net sales of 866.4 billion won.
All sectors were in decline. Many sectors saw drops of more than 4%, including transportation and storage (-7.70%), chemicals (-5.48%), transport equipment and parts (-5.25%), distribution (-5.07%), general services (-4.89%), telecommunications (-4.77%), pharmaceuticals (-4.69%), securities (-4.43%), finance (-4.41%), textiles and apparel (-4.21%), paper and wood (-4.21%), and construction (-4.14%).
All of the top 10 stocks by market capitalization also plunged. HD Hyundai Heavy Industries saw the steepest drop at -6.1%, followed by Doosan Enerbility (-5.8%), SK Square (-5.1%), Kia (-5.0%), Hanwha Aerospace (-4.8%), Hyundai Motor (-4.5%), Samsung Biologics (-4.3%), Samsung Electronics (-4.1%), LG Energy Solution (-3.0%), and SK hynix (-2.2%).
The KOSDAQ started at 1,112.08, down 2.25% from the previous day. In the early session, the index extended its decline to 6.12%, dropping to 1,068.05. After a brief rebound, the index soon widened its losses again, recording 1,082.22 as of 9:36 a.m., down 4.88% from the previous day.
Net buying by both foreigners and institutions was also observed in the KOSDAQ market. They recorded net purchases of 62.9 billion won and 258.6 billion won, respectively, while individuals recorded net sales of 322.2 billion won.
Again, all sectors declined. Several sectors posted drops near 5%, including transport equipment and parts (-5.63%), construction (-5.22%), other manufacturing (-5.05%), pharmaceuticals (-4.88%), metals (-4.61%), transportation and storage (-4.60%), and paper and wood (-4.51%).
The majority of the top 10 KOSDAQ stocks by market capitalization also fell. Caregen and Samchundang Pharm had the largest drops at -7.0%, followed by Rainbow Robotics (-6.7%), HLB (-6.6%), ABL Bio (-5.9%), Legochem Bio (-5.0%), Ecopro (-4.8%), Alteogen (-4.8%), and Ecopro BM (-4.0%). Rino Industrial was the only stock to rise, up 0.9%.
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