Asia-Pacific markets experienced sharp declines, with South Korea preparing to actively implement a market stabilization plan worth 100 trillion won. Investors are assessing the impact of recent developments.

Markets across the Asia-Pacific region faced a severe downturn on March 4, extending previous losses. Following what was termed "Black Tuesday," the region encountered what some are calling "Black Wednesday."

South Korea's stock market, previously one of the best performers this year, fell sharply for a second consecutive day. Trading was temporarily halted after the market plunged by as much as 12%, marking its largest single-day drop since 2008. Japan's Nikkei index also fell dramatically, losing over 2,000 points.

Earlier enthusiasm for artificial intelligence had driven South Korea's benchmark index up nearly 50% at its peak this year. Market sentiment was extremely bullish, forcing analysts to repeatedly raise their already optimistic forecasts to keep pace with rising share prices. However, this upward momentum is rapidly unwinding. Forced liquidations of leveraged positions may be accelerating the losses. As rising oil prices, driven by conflict in Iran, threaten a resurgence of inflation and pressure oil-importing nations—South Korea is the world's eighth-largest crude consumer—investors are reassessing their positions in overheated stock markets.

"The volatility is too extreme; making predictions has become nearly impossible—analysis is no longer effective," said An Hyungjin, CEO of Seoul-based Billionfold Asset Management. "Retail investors also appear hesitant; buy orders have been disappearing since yesterday. While we are selecting quality stocks and hedging, this is not a clear opportunity to enter the market."

Kim Dojoon, CEO and Chief Investment Officer of Zian Investment Management in Seoul, noted, "There is a significant amount of credit trading in the market, particularly in heavyweight stocks, where investors' margin ratios are only 30% to 40%." He indicated that these positions are facing forced liquidation and suggested that if declines continue on Thursday, few would be willing to step in and buy.

On March 4, Lee Eog-weon, Chairman of the Financial Services Commission, convened an emergency meeting to review financial market conditions. The meeting, attended by the Financial Supervisory Service and financial market experts, aimed to assess the increased volatility in South Korean stocks linked to recent Middle East tensions.

The Financial Services Commission also stated that if market volatility becomes excessive, it will actively utilize the currently operational market stabilization plan, valued at "over 100 trillion won," and closely monitor market trends with relevant institutions. Until financial markets stabilize, the Commission plans to maintain a 24-hour monitoring system and closely share updates on the Middle East situation with relevant departments through a financial market task force.

As heightened Middle East tensions severely dampened market sentiment, Thailand's benchmark stock index plummeted 8%, triggering a trading halt. Trading on the Stock Exchange of Thailand was suspended for 30 minutes starting at 12:18 PM local time. If the decline had widened to 15%, trading would have been halted for another 30 minutes. A broad sell-off is sweeping Asian stock markets as investors grapple with significant uncertainty regarding the duration and impact of the conflict involving Iran. Analysts pointed out that Thailand's substantial energy imports make it one of the economies in the region least resilient to oil price spikes caused by the conflict.

Turning to China's A-share market, the Shanghai Composite Index fell nearly 1% on March 4, closing below the 4,100-point level. By the end of trading, the Shanghai Composite was down 0.98%, the Shenzhen Component Index declined 0.75%, the ChiNext Index fell 1.41%, and the STAR Market Composite Index dropped 0.65%.

In the market, 1,745 stocks advanced, with 46 hitting the daily upside limit, while 3,640 stocks declined.

The memory chip sector saw significant gains, with shares of Biwin Storage and Demingli rising by the daily limit. The power and grid equipment sectors strengthened, with companies like Ankerui Electric hitting the limit-up. Defense stocks were active, with Aerospace CHN Composite rising by the limit and China UAV gaining over 15%. Agricultural stocks rose during the session, with Yasia Group securing its fourth consecutive limit-up and China Seed Group hitting the limit.

On the downside, oil and gas stocks underwent adjustments, with RenZhi Shares falling by the daily limit. The shipping sector declined, with Phoenix Shipping dropping by the limit.