Asian markets showed mixed results on Monday, with most indices gaining ground except for South Korea’s Kospi index, which plummeted nearly 5%. The sharp decline in South Korea’s market was largely driven by a sell-off in artificial intelligence-related stocks, as investors expressed growing concerns over the high valuations within the sector. Major technology companies such as Samsung Electronics and SK Hynix suffered significant losses, dropping 4.4% and 3.3% respectively.
Meanwhile, oil prices experienced a notable surge. Brent crude jumped 2.6% to hit $90.40 per barrel, while U.S. crude increased by 2.2%, reaching $83.58 per barrel. This rise in oil prices came amid escalating tensions between the United States and Iran, which heightened fears about potential disruptions in the Middle East. The situation intensified concerns over global oil supplies, particularly as tanker traffic through the Strait of Hormuz, a critical corridor for energy exports, saw a marked slowdown.
Elsewhere in Asia, stock market performances varied. Taiwan’s market remained largely stable, although Taiwan Semiconductor Manufacturing Co. managed 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 also edged upward, whereas India’s Sensex dipped by 0.9%.
The global tech sector has been under scrutiny, with investors questioning the sustainability of the extensive investments in artificial intelligence, which some fear may have resulted in a market bubble. This sentiment was further compounded by the debut of Kimi K3, an open-source AI model introduced by Beijing’s Moonshot AI, which has intensified competition in this rapidly advancing field.
On Wall Street, the previous week concluded on a downbeat note, with the S&P 500, Dow Jones Industrial Average, and Nasdaq all closing with losses. Chip stocks were particularly hard-hit, as seen in the declines of major companies like Nvidia, Broadcom, and AMD.