Asian Markets See Mixed Results Amid Global Tensions and AI Sector Concerns

Asian stock markets experienced varied outcomes on Monday. Notably, South Korea’s Kospi index plummeted nearly 5% as investors pulled back from stocks linked to artificial intelligence. Japan’s markets were closed due to a holiday, while U.S. futures showed mixed results. Meanwhile, oil prices surged, with Brent crude exceeding $90 per barrel, driven by escalating tensions between the U.S. and Iran.

This escalation, marked by continued exchanges of strikes for the ninth consecutive night, has brought about significant geopolitical concerns. Both nations have conducted deadly operations, with Iran targeting U.S. allies in the Middle East. Such tensions have nearly stalled tanker traffic in the Strait of Hormuz, a vital channel for global oil distribution, further straining supply pressures.

Patterson and Manthey of ING commented on the situation, stating, “The U.S. and Iran continue to exchange strikes, which are proving to be deadly for both sides. If this escalation goes unchecked, we could return to an environment of wide-scale attacks across the Persian Gulf.”

In Asian trading, the Kospi index, which had benefitted from the global AI trend, dropped 4.9% to 6,490.97. Prominent companies such as Samsung Electronics saw a 4.4% decline, while SK Hynix fell 3.3%. Taiwan’s Taiex, also focused on AI stocks, recorded a marginal dip of less than 0.1%, even as TSMC, the leading chip maker, rose by 2%. This rise followed a sharp 7.3% drop on Friday after announcing a $100 billion expansion plan for U.S. chip-making capacity.

Elsewhere in Asia, Hong Kong’s Hang Seng index increased by 2.1% to 25,105.78, while the Shanghai Composite index climbed 1.2% to 3,808.39. Australia’s S&P/ASX 200 went up by 0.2% to 8,815.30. Conversely, India’s Sensex saw a decrease of 0.9%.

The AI-related stock downturn continued from Friday, as concerns grew over potential overvaluation in the sector. This apprehension was fueled by promises of massive AI spending and the debut of Moonshot AI’s new model, Kimi K3, in Beijing. The impact echoed China’s “DeepSeek moment” in 2025, highlighting the competitive edge of economical Chinese AI models over rivals like Anthropic’s Claude and OpenAI’s GPT.

On Wall Street, the S&P 500 closed the week down 1% at 7,457.69. The Dow Jones Industrial Average decreased by 0.8% to 52,146.42, and the tech-heavy Nasdaq composite lost 1.4% to 25,520.24. Chip stocks, including Nvidia, Broadcom, and AMD, saw declines ranging from 1% to 2.2%.

SpaceX shares fell 5.4%, dropping below their IPO price of $135 per share, marking a significant low since debuting on Nasdaq last month.

Currency movements showed the U.S. dollar declining to 162.37 Japanese yen from a previous 162.43 yen, while the euro edged slightly up to $1.1446 from $1.1438.