Market volatility escalated Tuesday on news that Russia ordered troops into separatist-held eastern Ukraine, dragging down the nation’s stock indexes as well as virtual assets and sparking concerns that the geopolitical unrest is likely to expand short-term uncertainty in the financial market.

The benchmark Kospi ended lower Tuesday as investors raced to dump risky assets, falling to 2,706.79, down 1.35 percent or 37.01 points from Monday’s closing.

The Kospi, which has seen its earnings reduced in recent months because of worries over a rate hike by the US Federal Reserve, dropped to an intraday low at 2,690.09 in a similar dip seen last week.

Foreigners and institutional investors were net sellers, offloading 330 billion won ($276 million) and 382 billion won, respectively, offsetting a net buying of 670 billion won by retail investors. The most liquid three-year treasury bond yield fell 3.6 basis points to 2.327 percent.

“The Ukraine crisis is not the main reason we’re not seeing higher investor optimism,” said Lee Kyung-min, an analyst at Daishin Securities, referring to an already jumpy local stock market that has seen foreign outflows since January.

Lee added that the Korean government should look at how the financial markets around the world would respond to concerns over a sluggish global economy, highlighting the need to tighten monetary policies while not dampening growth.

The chief of the Financial Services Commission said he was aware of heightened volatility, noting that he would closely monitor market developments and prepare contingency arrangements. The top financial policymaker routinely checks up on the country’s two stock exchanges.

Meanwhile, data showed that Korea’s grain import prices hit a record high in December last year amid a deepening Russia-Ukraine crisis. Russia is the world’s top wheat exporter while Ukraine is one of the four major corn exporters globally.

The grain imports cost the government $849 million in November and $895 million in December last year, hitting a record high in the last month. The figure slid to $838 million in January, according to the Korea Customs Service, which began compiling the data in 2000.

It was the first time the import prices surpassed $800 million for three straight months.

“There are concerns over potential agflation, a global food price rise, because Ukraine accounts for 12 percent of wheat and 16 percent of corn exports worldwide,” said You Seung-min, an analyst at Samsung Securities.

The Ministry of Agriculture, Food and Rural Affairs has said that it was closely monitoring the situation and that it would work to cushion the impact of an extended standoff, as geopolitical tensions drive up oil prices, fueling supply concerns that have kept the prices near $100 a barrel.

“The oil prices are rallying on a supply bump. The energy markets are rattled. My concern here is that all the instability could lead to a knock-on impact to other markets,” You said.

Like oil, energy markets are expected to take a hit if tensions boil over since Russia supplies Europe about 35 percent of natural gas it needs through Germany, using pipelines under Ukraine, Belarus and Poland. Analysts said the natural gas exports to Europe would be cut if the US slaps sanctions on Russia.

The US said it would impose sanctions against people doing business in Ukraine’s breakaway regions, adding Russia’s violation of international commitments called for more measures. But an emergency United Nations Security Council meeting, held Monday, adjourned with no action taken.