The South Korean stock market has fallen, dropping 20% from its peak in February.

Sina Finance reported on March 31st that the benchmark stock index in South Korea fell as tensions in the Middle East escalated, pushing up oil prices, triggering inflation concerns, and dampening risk appetite for the market mainly led by technology stocks. The South Korean Kospi index fell by 4.4% at one point, pulling back about 20% from the record high reached at the end of February. The two largest stocks in the country, Samsung Electronics and SK Hynix, both saw declines of over 5%, exerting the greatest drag on the stock index. This pullback highlights the quick change in sentiment in this market closely related to AI-driven spending. Concerns about accelerating inflation have cast a shadow over interest rate prospects, leading investors to question whether the AI boom supporting memory chip demand can continue. "Everyone's focus is on this war in the Middle East," said Gerald Gan, chief investment officer at Reed Capital Partners. "As long as neither side shows major signs of willingness to compromise, the stock market, including the tech giants in the Kospi index, will further weaken."