Asian stock markets showed a mixed performance on Monday, as South Korea’s Kospi index took a significant hit, dropping nearly 5%. This decline comes amidst a wave of sell-offs in artificial intelligence-related stocks, driven by investors’ growing unease over potential overvaluation in the sector. Meanwhile, oil prices experienced a notable surge, with Brent crude jumping 2.6% to hit $90.40 per barrel, and U.S. crude climbing 2.2% to $83.58 per barrel. These increases are attributed to escalating tensions between the United States and Iran, which have sparked concerns about potential disruptions in the Middle East.
The global oil supply outlook has become more uncertain, as tanker movements through the Strait of Hormuz—a crucial passage for energy exports—have slowed considerably. Reflecting broader market trends, South Korea’s Kospi index plummeted by 4.9%, significantly impacted by losses in major tech firms. Notably, Samsung Electronics saw a 4.4% drop, and chipmaker SK Hynix experienced a 3.3% decline.
In contrast, Taiwan’s stock market remained relatively stable, with Taiwan Semiconductor Manufacturing Co. recording a 2% gain. Other Asian markets displayed varied results: Hong Kong’s Hang Seng index rose by 2.1%, China’s Shanghai Composite increased by 1.2%, and Australia’s benchmark index saw slight gains. On the downside, India’s Sensex dipped by 0.9%.
Globally, technology stocks are facing pressure as investors reassess the sustainability of massive investments in artificial intelligence, questioning whether a market bubble might be forming. This sentiment has been further influenced by the introduction of Kimi K3, a new AI model from Beijing-based Moonshot AI, which has heightened competition within the sector.
In the U.S., Wall Street concluded the previous week on a downward trajectory, with all three major indices—the S&P 500, Dow Jones Industrial Average, and Nasdaq—recording losses. Chip stocks were notably affected, with prominent companies such as Nvidia, Broadcom, and AMD experiencing declines.