Amid concerns that the United StatesIran war will be prolonged, the KOSPI on the 4th experienced the ‘worst day’ in its history. The index fell 12.06% in a single day, the largest drop on record. It surpassed the decline seen immediately after the 2001 9·11 attacks. The KOSPI 200 Volatility Index (VKOSPI), often called the Korean ‘fear index’, closed at 80.37, up 27.61% from the previous session on the 4th, the highest since the index was created in April 2009. Samsung Electronics shares plunged more than 20% over two days.

The KOSPI plunged 12.06% on the day, the largest single-day decline since its launch in January 1983. On an intraday basis, it sank as much as 12.65%, the worst in 25 years and 11 months since April 17, 2000 (-12.7%). The point decline that day, at 698.37 points, was also an all-time high.

The KOSDAQ also tumbled 14% on the day, the biggest single-day drop since its launch in January 1997.

Historically, the KOSPI has fallen more than 10% only four times including today. These were major external shocks or crises severe enough to threaten a market breakdown: the 9·11 attacks (September 12, 2001, -12.02%), the dot-com bubble (April 17, 2000, -11.63%), and the global financial crisis (October 24, 2008, -10.57%). The blow from the US strike on Iran was similarly significant.

Until now, when the KOSPI plunged 7% or more (nine instances excluding today), it rebounded the following day in every case except twice in October 2008; this time, however, it fell even more than the previous day.

The shock to the KOSDAQ was also severe. Its previous worst single-day fall was -11.71% on March 19, 2020 during the COVID-19 pandemic. The decline today on KOSDAQ exceeded that by 2.29 percentage points.

Compared with Japanese and Taiwanese markets, which fell in the 3% to 4% range, the drop in the domestic market was notably larger.

Brokerages view the steep drop as a mirror of the previous sharp run-up. In short, the burden from ‘overheating’ had grown heavy.

Large-cap stocks that had led the market fell especially hard. The domestic market’s ‘Top 3’Samsung Electronics (-11.74%), SK hynix (-9.58%), and Hyundai Motor (-15.80%)plunged, marking a second straight day of roughly 9% crashes. Hanwha Aerospace, a defense name that had risen the previous day, also slumped (-7.61%).

Samsung Electronics, which had hovered at the ‘210,000-won Samsung’ level on the 27th of last month, fell 20.46% over two days to 172,200 won. SK hynix, whose share price had topped 1,060,000 won, fell 19.98% to 849,000 won, and Hyundai Motor plunged 25.67% to 501,000 won.

Advancers on the KOSPI numbered just 13, a mere 1.41% of the listings traded that day. All were oil or commodity-related companies, including Daesung Petroleum. On KOSDAQ, only 1.46% of traded stocks rose.