South Korea: Market Turmoil and Global Sell-Off Update

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1. KOSPI Market Closing Brief

• KOSPI Rebounds (As of March 27): The KOSPI dipped to the 5,200 level early in the session but managed a steady recovery throughout the afternoon, closing at 5,438.87—a 0.4% decline. The KOSDAQ finished the day slightly in the green. Initial losses were driven by anxiety over the U.S.-Iran peace talks and news regarding the launch of Google's TurboQuant.

• Record Foreign Sell-Off: On March 26 alone, foreign investors dumped approximately 3.7 trillion KRW in stocks, the sixth-largest single-day sell-off since 1999. According to Koscom, total foreign net selling this month has reached 30 trillion KRW, largely fueled by the instability surrounding the Middle East conflict.

• Volatility and Sidecars: The domestic market has been extremely volatile since the U.S.-Iran conflict began, triggering "sidecars" roughly every other day. Meanwhile, the USD/KRW exchange rate continues to climb, hitting 1,508.9 KRW.

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2. U.S. Market Key Trends

• Five-Week Slump and 800-Point Dow Drop: On Friday, March 27, major U.S. indices extended their losing streak to five consecutive weeks. The Dow Jones plunged nearly 800 points, the S&P 500 hit its longest losing streak since 2022, and the Nasdaq officially entered correction territory. With oil prices spiking, "Magnificent 7" tech stocks collectively lost over $300 billion in market cap.

• Nasdaq Correction and S&P 500 Pressure: As the conflict in Iran stretches into its fifth week, investor anxiety is mounting. Forecasts suggest the S&P 500 could join other major indices in correction territory by next week (March 30–April 3).

• Selling Persists Despite Delayed Infrastructure Strikes: Even after the Trump administration delayed military action against Iranian energy infrastructure, the sell-off didn't stop. Brent crude surpassed $100 per barrel, further rattling the markets.

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3. Global Macro Outlook

• Oil Price Spike — The Biggest Risk: Brent crude topping $100 has supercharged global inflation fears. Central banks are warning that the prolonged conflict could shift inflation expectations, potentially leading to higher bond yields and a "wait-and-see" approach from fixed-income investors.

• Weakening Won: The USD/KRW exchange rate has surged to 1,508.9 KRW. The combination of war-related uncertainty and foreign capital flight is driving volatility, which hits the energy-dependent South Korean economy particularly hard.

• BlackRock on Inflation: According to the BlackRock Investment Institute, it’s still too early to see the full impact of the oil price spike in Japanese CPI and PPI data (as of March 20, 2026). Rising global energy costs are adding significant uncertainty to central bank policy paths.