South Korea’s benchmark Kospi index closed more than 2% lower on Wednesday, extending a sharp retreat from risk assets that began earlier in the week.
The sell-off was broad-based but particularly severe in the technology sector, where investors locked in gains following recent rallies fueled by artificial intelligence optimism.
Uncertainty surrounding a potential Iran nuclear deal weighed heavily on sentiment, prompting a flight to safety across Asian markets.
The decline marks a continuation of the volatility seen since Monday, when the index first fell sharply as geopolitical tensions escalated.
Tech-heavy indices in Seoul have been among the most sensitive to shifts in global risk appetite, and the current pullback reflects growing caution among traders who had previously bid up semiconductor and AI-related stocks.
The move underscores how quickly sentiment can shift when macroeconomic and geopolitical headwinds converge.