Japanese stock market electronic board. Photo courtesy. [AFP Yonhap News]

Amid escalating tensions surrounding the war in Iran, South Korean, Japanese, and Taiwanese stock markets all declined on March 30 (local time).

According to Yonhap Infomax, South Korea's KOSPI closed down 2.97% at 5,277.30, and the KOSDAQ index dropped 3.02% to 1,107.05.

Japan's Nikkei 225 Average (Nikkei Index) closed down 2.79%, and Taiwan's Taiex Index fell 1.80%.

China's Shanghai Composite Index, which had been on a downward trend in the morning, showed signs of a rebound around 4:30 PM Korean time.

At the same time, Hong Kong's Hang Seng Index was in decline.

With Yemen's pro-Iranian Houthi rebels participating in the war and the possibility of U.S. ground troop deployment being raised, a highly tense atmosphere pervades the Middle East.

U.S. Military [Yonhap News]

Earlier, on March 27, the Dow Jones Industrial Average closed down 1.73%, the S&P 500 Index fell 1.67%, and the Nasdaq Composite Index declined 2.15% on the New York Stock Exchange.

The Dow Jones entered a correction phase, falling more than 10% from its previous peak, and the S&P 500 Index recorded its longest decline in four years. The Nasdaq Index entered a correction phase on March 26.

International oil prices also fluctuated.

According to Bloomberg, Brent crude futures, the international oil benchmark, were trading at $116.68 per barrel as of 11:30 AM Korean time, up approximately 3.7% from the previous trading session.

U.S. business media CNBC reported that Brent crude prices are expected to surge over 55% this month, marking the largest monthly increase on record.

In global bond markets, government bond yields are soaring.

According to the electronic trading platform Tradeweb, the yield on the 10-year U.S. Treasury note exceeded 4.48% at one point on the morning of March 27, U.S. Eastern Time. This is the highest level in eight months, since July of last year.

The Financial Times (FT) reported on March 29 that due to the repercussions of the Iran war, concerns about inflation and fiscal burden have grown, causing government bond yields in major Eurozone countries like Italy, France, and Spain to surge to their highest levels in years.

Bond yields move inversely to prices. A surge in bond yields signifies a sharp decline in bond prices.

 [Yonhap News]

◇ Stocks, Bonds, and Gold Prices Decline Simultaneously

Bloomberg pointed out that, contrary to past precedents, stock, bond, and gold prices are all declining simultaneously, suggesting growing concerns about stagflation (economic recession amidst high inflation).

Previously, on March 24, Bloomberg reported that the international spot gold price had fallen by approximately 17% since February 27, the day before the war in Iran began.

On March 30, according to Bloomberg, Jim McCormick, chief global macro strategist at Citi, stated that the war in Iran is increasing the possibility of stagflation in the global economy. He also predicted that long-term bond yields would rise significantly in the coming months.

In an interview with Bloomberg TV, he diagnosed that as a result of this war, growth will be revised downward and inflation upward over the next 6 to 9 months, which is a bad combination for the market overall, being detrimental to both bonds and stocks.