Asian markets showed mixed results on Monday, with a significant downturn in South Korea’s Kospi index, which plummeted nearly 5% as investors rushed to sell off artificial intelligence-related stocks. This sell-off was driven by mounting concerns regarding the valuations within the AI sector. Major technology companies in South Korea took a hit, with Samsung Electronics falling 4.4% and chipmaker SK Hynix losing 3.3%.
In contrast, other Asian markets fared better. Hong Kong’s Hang Seng index rose by 2.1%, and China’s Shanghai Composite saw a 1.2% increase. Taiwan’s stock market remained relatively stable, bolstered by a 2% gain in Taiwan Semiconductor Manufacturing Co. Meanwhile, Australia’s benchmark index recorded a slight increase, while India’s Sensex experienced a 0.9% decline.
Global oil prices surged as tensions between the United States and Iran intensified, sparking fears of potential disruptions in the Middle East. Brent crude jumped 2.6% to reach $90.40 per barrel, while U.S. crude rose 2.2% to $83.58 per barrel. These concerns were heightened by a significant slowdown in tanker traffic through the Strait of Hormuz, a crucial route for energy exports.
The tech sector worldwide has faced pressure as investors reassess whether the heavy investments in artificial intelligence have led to a market bubble. This sentiment was exacerbated by the introduction of Kimi K3, a new open-source AI model developed by Moonshot AI in Beijing, which has further intensified competition in this rapidly evolving field.
On Wall Street, last week concluded with all major indices closing in the red. The S&P 500, Dow Jones Industrial Average, and Nasdaq all reported losses, with chip stocks among the hardest hit. Notable declines were seen in companies such as Nvidia, Broadcom, and AMD, reflecting the broader concerns over the tech sector’s future prospects.