The ongoing conflict between the U.S. and Iran has significantly affected the KOSPI index, which experienced a dramatic decline of over 5% during intraday trading. This downturn arose amidst heightened concerns regarding the war's potential escalation throughout the Middle East, causing anxieties about a prolonged conflict. The previous day was a public holiday in South Korea, leaving the market to absorb the shocks experienced across major Asian stock exchanges.

As trading commenced on the 3rd, the KOSPI opened at 6165.15, down by 1.26% or 78.98 points, briefly recovering to 6180.45 before suffering further losses. Institutional and foreign investors' heavy selling led to a significant drop in the index, despite individual investors attempting to mitigate the plunge by purchasing over 5 trillion won worth of stocks. However, their efforts were insufficient to reverse the overall downward trend.

The most concerning factor driving the domestic market's decline is the rising ‘Middle East risk.’ The intensification of hostilities between the U.S. and Iran, particularly with new threats regarding the blockade of the Strait of Hormuz, has created considerable uncertainty in global trading conditions. Industry analysts predict that fluctuations in oil prices and interest rates will have a substantial impact on the market’s trajectory, underscoring the volatility that may continue as geopolitical tensions persist.