South Korea and Japan bear brunt of global stock sell-offs amid oil shock

“Equity markets in Japan, Korea and Taiwan have sold off sharply as investors reacted to higher oil prices and geopolitical uncertainty,” said Ray Sharma-Ong, deputy global head of multi-asset bespoke solutions at Aberdeen Investments. “These economies are net energy importers, which partly explains the negative market reaction. The sell-off also reflects a risk-off rotation out of cyclical sectors into defensive assets.”

Asia was the most energy import-dependent region, according to Morgan Stanley. Oil and gas trade deficits accounted for 2.1 per cent of the economy in the region, compared with 1.5 per cent for Europe, it said. South Korea was the most exposed among major nations, with an energy trade deficit equivalent to 4.3 per cent of its economy, while for Japan it was 2.7 per cent and for China 1.8 per cent.