Seoul: Seoul stocks fell over 4 percent Tuesday, weighed by heavy foreign selling, as U.S. President Donald Trump renewed threats against Iran, with no end in sight to the monthlong Middle East war. The Korean won weakened sharply against the U.S. dollar. The benchmark Korea Composite Stock Price Index (KOSPI) fell 224.84 points, or 4.26 percent, to 5,052.46, extending the losing streak to a fourth session.

According to Yonhap News Agency, risk-off sentiment intensified as the conflict, which began in late February following U.S.-Israeli strikes on Iran, showed signs of further escalation. On Monday (U.S. time), Trump threatened to "completely obliterate" Iran's Kharg Island, a key oil hub, as well as its power plants and oil wells, if a peace deal with the United States is not reached "shortly."

Tehran, however, dismissed the peace proposals as "unrealistic, illogical and excessive," while a parliamentary security committee approved a draft bill to introduce a toll system for the Strait of Hormuz, according to foreign media reports. Israeli Prime Minister Benjamin Netanyahu said the war had achieved more than half its aims, though he did not put a timeline on when it would end.

Iran-backed Houthi militants in Yemen joined the war over the weekend, stoking fears of further disruptions to global oil supplies. "The Iran crisis, coupled with rising oil prices, is pushing up the equity risk premium," Lee Jung-bin, an analyst at Shinhan Securities, said. "A cautious approach to the market seems to be needed, given the possibility of downward revisions to earnings forecasts amid geopolitical risks."