Oil worries and Iran war hammer Asian stocks, with Korea’s KOSPI taking the biggest hit

Asian equity markets continue to bear the brunt of investor anxiety over U.S. President Donald Trump’s launch of large-scale strikes on Iran last week, amid worries of an extended conflict in the Persian Gulf and a sharp shock to energy markets. 

Market indices plunged on Monday. Japan’s Nikkei 225 fell by around 5.2% on Monday, while South Korea’s KOSPI sank by 6.2%. Vietnam’s VN-Index is down by around 5.7%. Other Asian markets dropped by smaller amounts: Hong Kong’s Hang Seng Index fell by around 1.8%, and India’s NIFTY 50 is down by 2.5% in morning trading.

Monday’s plunge adds to a steep slide in Asia’s markets since Trump’s Iran strikes. The KOSPI is down by over 16% since the Iran war began. Japan’s Nikkei 225 and Australia’s ASX 200 are down by around 10% and 6% respectively over the same period.

Many Asian economies rely on oil exports from the Gulf, which have slowed to a crawl since Iran closed the Strait of Hormuz last week. South Korea sources about 70% of its crude oil from the Middle East; for Japan, that number is closer to 90%. The price of WTI crude briefly surpassed $115 a barrel on Monday morning. 

The energy shock has reversed a rally in Asia’s AI-linked, tech-heavy growth stocks that had soared in the weeks just ahead of the Gulf conflict. South Korean chipmakers Samsung Electronics and SK Hynix both surged on the back of soaring demand for memory chips. At one point, the two companies together eclipsed the combined valuation of Alibaba and Tencent.

Samsung and SK Hynix have now both dropped by around 20% respectively since U.S. strikes began.

China, by comparison, has proved less volatile than its neighbors, due to its long-term energy planning and massive stockpiles of oil. The CSI 300 index, which tracks stocks traded in Shanghai and Shenzhen, is down by only 2.3% since the war began. 

“If the current Middle East situation continues to persist, China could even be a potential beneficiary of rotation out of Northeast Asian markets,” notes BNP Paribas analyst William Bratton in a March 9 report.

The U.S. stock market has also held relatively steady, with the S&P 500 falling by just 2.0% over the past week. The U.S.’s status as a major oil producer has helped to cushion its economy from the effect of reduced supplies of Middle Eastern oil. 

Still, U.S. investors could be realizing the full extent of the Iran war’s economic repercussions. S&P 500 futures are down by around 1.5%, as of 2:00am Eastern time.

Despite the short-term sell-off, Goldman Sachs’ analysts have urged investors to view the KOSPI’s decline in the context of an exceptional 176% increase since April 2025. 

“We view the pullback as a correction that will likely be followed by a recovery to new highs after a period of consolidation,” the firm’s analysts wrote in a March 6 report.

Other analysts agree that markets will likely recover from the Iran strikes in the long-run. 

“We expected a knee‑jerk risk‑off market reaction,” says Eli Lee, chief investment strategist at OCBC‑owned Bank of Singapore. “But barring an oil shock, history shows that geopolitical events typically do not negatively impact equity prices on a prolonged basis.”

This story was originally featured on Fortune.com