South Korea's stock market falls sharply as central bank raises interest rates

Asian stock markets fell on Thursday, July 16, 2026, as military conflict between the United States and Iran continued. South Korea's Kospi index dropped sharply, losing 6.6% to close at 6,816.70. The Bank of Korea also raised interest rates for the first time since 2023, because prices have been rising too fast. This kind of rate increase usually slows an economy down. Taiwan's Taiex index fell a smaller 0.3%. Oil prices also dropped, which was surprising. Normally, military strikes push oil prices higher. Iran attacked Kuwait and Bahrain using missiles and drones during this period. Despite the fighting, oil prices did not rise. South Korea's sharp market fall and surprise rate hike show that the country is facing serious economic pressure.