South Korea's KOSPI stock index fell about two% to below the 8,600 level on Thursday [1].

The downturn reflects growing investor anxiety over geopolitical instability in the Middle East, which has triggered a sharp sell-off of Korean assets and a decline in the value of the national currency.

Renewed armed conflict in the Middle East pushed international oil prices higher and stalled cease-fire talks between the U.S. and Iran [1]. These factors prompted a wave of foreign capital flight from the Seoul Stock Exchange. Foreign investors sold roughly 7 trillion won of Korean equities [1].

This sell-off marks the 19th consecutive day that foreign investors have been net sellers in the Korean market [1]. The sustained exit of foreign capital has placed significant downward pressure on the KOSPI, ending a three-day winning streak [1].

"The KOSPI closed at the 8,600 level, down 1.8%, ending a three-day streak of gains," said reporter Ryu Hwan-hong of YTN [1].

The volatility extended to the foreign exchange market, where the South Korean won weakened significantly against the U.S. dollar. The KRW/USD exchange rate rose above 1,530 won per dollar during trading [1].

"The KOSPI collapsed helplessly as foreigners net sold nearly 7 trillion won," said Ryu [1]. He said that the streak of foreign net selling had reached 19 consecutive trading days [1].

The combination of rising energy costs and diplomatic deadlock in the Middle East continues to destabilize regional markets, making South Korea's export-heavy economy particularly vulnerable to global shocks.

“Foreign investors sold roughly 7 trillion won of Korean equities”

The simultaneous drop in the KOSPI and the weakening of the won indicate a 'risk-off' sentiment among global investors. Because South Korea is heavily dependent on energy imports and global trade, renewed conflict in the Middle East creates a double blow: increasing the cost of raw materials while decreasing the attractiveness of its equity markets. The 19-day streak of foreign selling suggests a systemic withdrawal of capital rather than a short-term correction.