On the 4th, the KOSPI index is displayed on the dealing room screen at the Hana Bank headquarters in Jung-gu, Seoul. Photo by Yonhap News.

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According to the Korea Exchange on March 4, at 11:16:33 a.m. that day, the circuit breaker was triggered on the KOSDAQ market, resulting in a 20-minute trading suspension. The measure was taken because the KOSDAQ index had fallen more than 8% from the previous closing price and maintained this level for over one minute, meeting the activation requirement.

At the time the circuit breaker was triggered, the KOSDAQ index was down 8.11% from the previous day, at 1,045.37. Consequently, trading of all listed stocks on the KOSDAQ market was temporarily suspended. Trading in stock-related futures and options markets also came to a halt.

The circuit breaker was also soon triggered on the KOSPI market. At 11:22 a.m. on the same day, the Korea Exchange activated the circuit breaker on the KOSPI market and suspended trading for 20 minutes.

This simultaneous triggering of circuit breakers on both major markets in Korea is the first occurrence since August 5, 2024, about one year and seven months ago. At that time as well, the global financial market experienced heightened volatility, leading to continued panic selling.

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With the escalation of geopolitical tensions in the Middle East due to the war between the U.S. and Iran, fear has gripped the markets. Concerns over Iran potentially blocking the Strait of Hormuz drove West Texas Intermediate (WTI) crude oil up 4.7% to $74.56, fueling worries about a resurgence of global inflation. On March 3 (local time), all three major U.S. stock indices closed lower, and overnight, the won/dollar exchange rate surpassed 1,500 won.

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There also appears to have been selling pressure in the domestic market due to the burden of rapid gains. While the U.S. stock market remained mostly flat since the beginning of the year, the KOSPI surged nearly 50% in just two months. Having entered a technically overheated zone and with external geopolitical risks mounting, a "sell first" mentality has come to dominate the market.

Due to the aftermath of the Middle East crisis, the won/dollar exchange rate soared sharply on the 4th, displayed at a currency exchange booth in Myeongdong, Seoul. Photo by Yonhap News.

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