Asian stock markets opened the week under pressure on Monday as a fresh flare-up in the Middle East lifted oil prices and weighed on investor risk appetite. The rout was most acute in South Korea, where the KOSPI declined more than 5% as heavyweight technology names came under intense selling.
Futures tied to U.S. equity indices were also tracking lower, with those linked to the Nasdaq - heavily exposed to technology stocks - leading the downside moves.
Heavyweights drag South Korea
South Korea’s benchmark KOSPI extended its recent selloff, sliding in excess of 5% as large-cap chipmakers were hit hard. Samsung Electronics (KS:005930) shares fell nearly 7%, while SK Hynix (KS:000660) dropped about 11%, amplifying losses in the broader market.
Japan’s Nikkei 225 declined 1.3% and the broader TOPIX index dipped 0.8%, reflecting a regional move away from cyclical and high-valuation technology exposure.
Geopolitical escalation and oil
Investor sentiment soured after a weekend escalation in the Middle East. Iran expanded missile and drone attacks to Gulf states in retaliation for U.S. military strikes, and it declared the Strait of Hormuz closed. The U.S. disputed Iran’s claim, with President Donald Trump saying commercial shipping through the waterway remained open under U.S. protection.
Against that backdrop, Brent crude climbed more than 3% during Asian trading on Monday. The jump in oil prices rekindled investor concern that rising energy costs could feed into higher inflation, complicating outlooks for global interest rates and central bank policy paths.
Regional index moves
China’s Shanghai Composite fell 0.7% while the blue-chip Shanghai Shenzhen CSI 300 nudged 0.3% lower. Hong Kong’s Hang Seng traded largely flat. Australia’s S&P/ASX 200 slipped 0.3% and Singapore’s Straits Times Index ticked down 0.2%. Futures linked to India’s Nifty 50 were down about 0.6%.
Technology stocks, which have helped drive gains across Asian markets earlier in the year, were among the biggest drags as investors reduced exposure to higher-valuation sectors in the face of geopolitical and commodity price risk.
Looking ahead
Market participants are focused on a busy calendar this week. U.S. consumer price inflation figures, due on Tuesday, are expected to provide fresh guidance on the Federal Reserve’s policy stance amid concerns that energy-driven inflation could prompt officials to keep borrowing costs elevated. Investors are also monitoring second-quarter corporate earnings, including reports from major U.S. banks and Taiwan Semiconductor Manufacturing later in the week, to see if attention shifts back toward company fundamentals and artificial intelligence-related growth themes.