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Asian markets plunge amid tech sector rout
Stock markets worldwide tumbled on Monday as a sharp sell-off in technology shares triggered steep losses across Asia, with South Korea's Kospi index halting trading after an 8.8% intraday drop.
Circuit breaker activated in Seoul
Trading on South Korea's Kospi was suspended for 20 minutes shortly after the market opened when the index plunged nearly 9%. The halt, part of a circuit breaker mechanism to curb panic selling, marked the third activation this year. The index closed 8.3% lower, its worst performance in over a year. Japan's Nikkei 225 followed suit, ending the day down 3.8%.
Tech stocks under pressure
Major South Korean chipmakers led the decline, with Samsung Electronics and SK Hynix closing 10% and 9.5% lower, respectively. Taiwan's TSMC, a key supplier to Nvidia, fell 3%, dragging the Taiex index down with it. In the U.S., the Nasdaq Composite lost 4% on Friday-its largest single-day drop since 2023-amid concerns over inflated valuations in artificial intelligence-driven stocks.
"Investors are repositioning over fears that AI investments may be overvalued," said Charu Chanana, chief investment strategist at Saxo. "The burden of proof has gone up-markets want to see real revenue from AI demand."
Charu Chanana, Saxo
Oil prices surge after Iran-Israel strikes
Brent crude jumped 4.6% to $97.34 a barrel, while U.S.-traded West Texas Intermediate rose 4.3% to $94.40 after Iran and Israel exchanged direct strikes for the first time since a ceasefire was brokered in April. Tehran warned of further attacks over the coming week, citing violations of the truce, while Israel retaliated with strikes on Iranian military targets.
U.S. President Donald Trump told Axios he was "very close" to finalizing a deal with Iran but expressed concern the strikes could derail negotiations. Analysts warned the conflict could disrupt oil flows through the Strait of Hormuz, a critical chokepoint for global energy shipments.
"Oil prices will remain volatile unless diplomatic efforts succeed," said Jiajia Yang, associate professor at James Cook University. "The strikes highlight unresolved political tensions."
Jiajia Yang, James Cook University
European markets dip, but losses muted
Europe's major indices opened lower but avoided the steep declines seen in Asia. Germany's DAX fell 0.9%, while the UK's FTSE 100 slipped 0.2%. Investors shifted focus to companies with stable income streams and dividends, according to Susannah Streeter of Wealth Club.
"There are undercurrents of worry about the surge in tech stock prices," Streeter said. "Investors are favoring reliability over speculation."
Susannah Streeter, Wealth Club
Outlook: Volatility expected to persist
South Korean President Lee Jae-myung acknowledged market turbulence but argued domestic shares remained "slightly undervalued." Meanwhile, Nvidia CEO Jensen Huang described the tech sell-off as a buying opportunity, though analysts cautioned against over-optimism without clearer signs of AI-driven revenue growth.
With geopolitical tensions and inflation concerns lingering, traders braced for continued volatility in both equities and commodities.
