Asian stocks plunge in tandem, not just Korea… Nikkei down 4%, Hang Seng down 3%

Korea’s Kospi plunges 9.99%… by far the steepest drop

Japan, Hong Kong and China all sliding sharply

Asian stock markets, not just Korea’s, are plunging across the board. The move is being attributed to expectations that Asian economies would be hit hardest by a potential closure of the Strait of Hormuz.

As of 2:50 p.m. on the 4th, South Korea’s Kospi is down 9.99%. The index was down as much as 12.55% intraday.

At the same time, Japan’s Nikkei is down 3.88%, Australia’s ASX down 1.98%, Hong Kong’s Hang Seng Index down 2.79%, and China’s Shanghai Composite down 1.3%.

Korea is posting by far the biggest decline, but other markets are also falling sharply. That is because Asia is expected to be the region most affected if the Strait of Hormuz is blocked.

The Strait of Hormuz is a chokepoint through which one-third of the world’s crude oil passes. In particular, 80% of oil tankers head to Asia, including South Korea.

As a result, Asia would bear the brunt of any closure of the Strait of Hormuz—and among Asian countries, South Korea, which relies on the Middle East not only for crude oil but also for liquefied petroleum gas (LPG), is expected to suffer the most. That is seen as a key reason Korea’s stock market is posting the steepest losses.

Park Subin, Hankyung.com reporter waterbean@hankyung.com