Tech stocks plunge in Asia after record rally and renewed Middle East attacks
Tech stocks in Asia plunged Monday after a record rally, with South Korea’s Kospi index halting trading due to a near 9% drop and Japan’s Nikkei 225 falling 4.5% amid renewed Middle East tensions and rising oil prices. Investors are repositioning amid fears of overvaluation in AI-driven investments, while conflicts between Iran and Israel escalate, threatening global markets and energy costs.
South Korea’s Kospi index triggered a 20-minute trading halt Monday after plummeting nearly 9% at opening, marking the third circuit breaker activation this year. The sell-off was driven by tech stocks, with major chipmakers like Samsung and SK Hynix seeing sharp declines, leaving the index down 7.9% by afternoon. Japan’s Nikkei 225 also fell 4.5%, its steepest drop in three months, as tech-heavy markets across Asia reacted to escalating tensions in the Middle East. Oil prices surged 4.6% to $97.34 per barrel for Brent crude, fueling inflation fears after Iran and Israel resumed strikes following a fragile April ceasefire. Investors are reassessing overvalued AI-driven tech stocks, with Saxo’s Charu Chanana noting demand must translate to ‘real revenue.’ Taiwan’s Taiex dropped after semiconductor giant TSMC fell 3%, while Nvidia’s CEO Jensen Huang called the slide a buying opportunity. The sell-off follows a 4% Nasdaq drop Friday, linked to US interest rate hike fears and persistent inflation tied to Middle East conflicts. South Korean President Lee Jae-myung dismissed the volatility as temporary, insisting domestic shares remain ‘slightly undervalued.’ Trading resumed in Seoul, but broader Asian markets like the Hang Seng and Shanghai Composite also declined. Analysts warn oil volatility will persist unless diplomatic efforts resolve the Iran-Israel standoff, which Trump urged Israel to avoid escalating further.
This content was automatically generated and/or translated by AI. It may contain inaccuracies. Please refer to the original sources for verification.