The stock markets in South Korea and Japan saw a recovery following the stabilization of international oil prices after a brief spike due to the conflict involving the U.S., Israel, and Iran.
Since the outbreak of the conflict involving the U.S. and Israel against Iran, financial markets in Asia, particularly in South Korea and Japan, have experienced high volatility driven by fluctuations in international oil prices. On March 9, oil prices surged to $119.5 per barrel, only to drop sharply to the low $90s the next day, leading to a significant recovery in stock markets that had seen drastic declines. The ongoing conflict continues to cause apprehension regarding the price of oil, further intensifying market instability.
According to data from MarketWatch, Brent oil futures traded at $91.12 per barrel on March 10, after experiencing a dramatic rise and subsequent fall. The spike in oil prices was partly triggered by Iran's selection of a new successor to the late Ayatollah Ali Khamenei, indicating a resolute stance towards ongoing conflicts. However, this was followed by international discussions among the G7 regarding strategic oil stock releases and statements from former U.S. President Donald Trump, which significantly lowered prices amidst fears of prolonged conflict.
The financial markets mirrored this volatility, with the Kospi index dropping 5.96% on March 9 before bouncing back 5.35% the following day. This led to the activation of a trading halt mechanism in the Korean stock market due to the rapid price swings. Foreign investors showed notable activity, with a net purchase of 1.1 trillion won, whereas individual investors sold off considerably. The Nikkei 225 and other regional indices similarly experienced comparable gains after prior losses, reflecting the broader impact of oil market dynamics on Asian financial markets.
