Asian markets showed mixed performances on Monday, with most indices rising except for South Korea’s Kospi, which plummeted nearly 5%. The sharp decline was triggered by a widespread sell-off of artificial intelligence-related stocks, as investors grew increasingly wary of the sector’s valuations. Major technology firms in South Korea suffered significant losses, with Samsung Electronics falling by 4.4% and chipmaker SK Hynix dropping 3.3%.
Amidst the stock market fluctuations, oil prices saw a notable surge. Brent crude rose by 2.6% to reach $90.40 per barrel, while U.S. crude climbed 2.2% to $83.58 per barrel. This increase reflects the growing tensions between the United States and Iran, which have sparked concerns about potential disruptions in the Middle East. The situation has also affected the flow of tanker traffic through the Strait of Hormuz, a critical conduit for global energy exports, which has slowed considerably.
Elsewhere in Asia, Taiwan’s stock market remained relatively stable, with Taiwan Semiconductor Manufacturing Co. experiencing a 2% gain. In contrast, Hong Kong’s Hang Seng index rose by 2.1%, and China’s Shanghai Composite saw a 1.2% increase. Australia’s benchmark index experienced a slight uptick, whereas India’s Sensex recorded a 0.9% decline.
The recent pressure on technology stocks extends beyond South Korea, as global investors reassess the massive investments in artificial intelligence. Fears of a potential market bubble have been exacerbated by the introduction of the Kimi K3, a new open-source AI model developed by Moonshot AI in Beijing, which has heightened competition in the rapidly advancing sector.
Meanwhile, Wall Street ended the previous week on a down note, with the S&P 500, Dow Jones Industrial Average, and Nasdaq all posting losses. Among the hardest hit were chip stocks, with notable declines in companies like Nvidia, Broadcom, and AMD.