Asia-Pacific experiences "Black Wednesday"! South Korea will actively launch a 1,000 trillion won market stabilization plan

【Introduction】Asia-Pacific Markets Plunge, South Korea to Actively Launch 100 Trillion Won Market Plan

Today’s market situation, I believe I don’t need to explain the reasons anymore. Unexpectedly, after “Black Tuesday,” the “Black Wednesday” has also arrived in the Asia-Pacific markets.

Let’s take a look at what happened.

Asia-Pacific Experiences “Black Wednesday”

On March 4th, the Asia-Pacific markets continued to decline.

This year’s hottest stock market, South Korea’s stock market, plunged for two consecutive days, hitting a circuit breaker at one point, and today fell 12%, marking the largest single-day drop since 2008. The Nikkei index plummeted over 2000 points.

The AI boom once helped South Korea’s index rise nearly 50% at its peak this year. At that time, market sentiment was extremely euphoric, forcing analysts to raise their already bullish forecasts to keep up with the rising stock prices.

However, this upward momentum is rapidly disintegrating, and forced liquidation (margin calls) on leveraged positions may be accelerating losses. The surge in oil prices triggered by the Iran war threatens inflation rebound and puts pressure on oil-importing countries—South Korea, the eighth-largest oil consumer in the world—causing investors to reassess overheated stock market bets.

An Hyungjin, CEO of Billionfold Asset Management in Seoul, said: “The volatility is too intense, making predictions almost impossible—analysis is no longer effective, and retail investors seem hesitant, with buying activity disappearing since yesterday. Although we are selecting quality targets and hedging, this is not a clear entry point.”

Kim Dojoon, CEO and Investment Officer of Zian Investment Management in Seoul, said: “There is a large amount of credit trading in the market, especially in heavyweight stocks, with margin ratios only around 30% to 40%.” He pointed out that these holdings are facing forced liquidation, and if there is another decline on Thursday, no one will dare to ‘catch the falling knife barehanded.’

On the 4th, Lee Eog-weon, Chairman of the Korea Financial Services Commission, held an emergency meeting to review the financial market situation. The meeting involved the Financial Supervisory Service (FSS) and financial market experts, aiming to assess the recent volatility in the Korean stock market triggered by the Middle East situation.

The Financial Services Commission also stated that if market volatility becomes excessive, they will actively utilize the ongoing “100 Trillion Won + α” Market Stabilization Plan and closely monitor market trends with relevant agencies.

Until the financial markets stabilize, the commission plans to maintain a 24-hour monitoring system and share the latest developments in the Middle East situation with relevant departments through the financial market task force.

As tensions in the Middle East escalate, crushing market sentiment, Thailand’s benchmark stock index plummeted 8%, triggering a trading halt. Trading on the Thai stock exchange was suspended for 30 minutes starting at 12:18 PM local time. If the decline further reaches 15%, trading will be paused again for 30 minutes.

Due to investors’ efforts to cope with the prolonged Iran war and the huge uncertainty it brings, a widespread sell-off is sweeping across Asian stock markets. Analysts point out that Thailand’s large energy imports make it one of the most vulnerable economies in the region to the spike in oil prices caused by the conflict.

Shanghai Composite Index Falls Nearly 1%, Losing 4100 Points

Looking back at our A-shares situation. On March 4th, the Shanghai Composite Index fell below the 4100-point mark. By the close, the index was down 0.98%, Shenzhen Component down 0.75%, ChiNext Index down 1.41%, and STAR Market Index down 0.65%.

A total of 1,745 stocks rose, with 46 hitting the daily limit, while 3,640 stocks declined.

Storage chip sector surged, with Biyi Storage and Demingli hitting the daily limit.

Power and grid equipment sectors strengthened, with Ankao Smart Electric and others hitting the daily limit.

Military stocks performed actively, with Aerospace Rainbow hitting the daily limit, and China Unmanned Drones rising over 15%.

Agricultural stocks surged during the session, with Yasheng Group hitting four consecutive limits, and Nongfasheng Seed Industry hitting the daily limit.

On the downside, oil and gas stocks experienced adjustments, with Renzhi Shares hitting the limit down.

Shipping sector declined, with Phoenix Shipping hitting the limit down.

(Source: China Fund News)