Asian markets fell sharply on Monday, with tech stocks leading the decline. Oil prices also rose due to renewed Middle East attacks.
Key facts
- •South Korea's Kospi index plunged nearly 9% on Monday, triggering a 20-minute trading halt.
- •Japan's Nikkei 225 index slid by around 4% due to a sharp sell-off in tech stocks.
- •Oil prices rose due to renewed Middle East attacks, with Brent jumping 3.7% to $96.50 a barrel.
- •Investors are 'repositioning' over fears that investments into artificial intelligence may be overvalued.
- •The conflict between Iran and Israel has disrupted the flow of oil and gas shipments from the Gulf.
- •US President Donald Trump urged Israel not to retaliate against Iran, saying 'we are very close to a final deal'
South Korea's stock market was forced to halt trading for 20 minutes after the Kospi index plunged nearly 9% on Monday. Japan's Nikkei 225 index also slid by around 4% as tech stocks fell. The decline was triggered by a sharp sell-off in technology stocks and rising energy prices.
Market Volatility
The halt in South Korea's stock market is part of a circuit breaker mechanism designed to prevent panic trading. This is the third time this year that the mechanism has been triggered. Traders are nervously watching a 'messy mix' of several shocks to the market, mainly tied to the tech sector and accelerated by rising energy prices, according to chief investment strategist Charu Chanana from Saxo.
Tech Sector Concerns
Tech stocks have seen a strong run in recent weeks, but investors are 'repositioning' over fears that investments into artificial intelligence may be overvalued. Markets like the Kospi and Nikkei are particularly exposed to such shocks given their exchanges are dominated by tech stocks. Investors are looking for clear signs that AI demand has translated into 'real revenue', Chanana said.
Middle East Conflict
Oil prices rose on Monday due to renewed attacks between Iran and Israel. The price of the global benchmark Brent jumped by 3.7% to $96.50 a barrel, while US-traded crude rose by 3.5%. Tehran has warned that the attacks are the start of a full week of strikes and are a response to a 'repeated violation' of a ceasefire agreed on 17 April between the US, Israel, and Iran.
This article was independently rewritten by ManyPress editorial AI from reporting originally published by BBC Business.
