On March 9 (Monday), dragged down by the escalation of the Middle East geopolitical conflict and inflation panic caused by the surge in international oil prices, major Asian-Pacific stock markets suffered a sharp decline, staging a “Black Monday”. Among them, the South Korean stock market performed the worst, plummeting sharply intraday and triggering the circuit breaker mechanism for the second time this month, the first time since March 2020 when the global epidemic broke out.
The Korea Composite Stock Price Index (KOSPI) opened sharply lower on the day, and then the decline expanded rapidly. It once plummeted by 8% intraday, touching the 8% circuit breaker threshold set by the exchange, and trading was suspended for 20 minutes. This is the second time that the South Korean stock market has “shut down” in just a few days after triggering a circuit breaker due to similar concerns in early March. After the resumption of trading, market panic failed to ease, and the index continued to decline. By the close of trading, the Korea Composite Stock Price Index fell sharply by 5.96% to 5251.87 points, the largest single-day decline since last year.
The Japanese stock market was also not spared. The Nikkei 225 Index fell unilaterally throughout the day, closing down 5.2% to 52728.34 points, the largest single-day decline in nearly a year. Major stock indexes in other major markets such as Australia, Singapore, and Hong Kong, China also closed down across the board, with declines generally between 2% and 4%.
Market analysts pointed out that the collective plunge of Asian-Pacific stock markets this time was mainly triggered by concerns about “stagflation” caused by the surge in oil prices. High energy costs will significantly push up corporate production costs and residents’ consumer prices, erode corporate profits and suppress consumer demand, thereby dragging down economic growth. In addition, the rising global risk aversion sentiment has led to capital outflow from risky assets to safe-haven assets such as the US dollar and gold, which has also exacerbated the capital outflow pressure on Asian-Pacific stock markets.
