Stock markets in Asia and Europe took nosedive Monday . Technology shares got hammered amid rising Middle East tensions. South Korea's Kospi index was hit hardest,plunging almost 9% right after opening,triggering a 20-minute trading halt. It ended down 8.3%. Japan's Nikkei dropped 3.8% too .
Tech stock slump spooked investors,especially with oil prices jumping as Iran and Israel clashed again. Brent crude shot up 4.6% to $97.34 a barrel,US crude rose 4.3% to $94.40. Inflation fears are back,clouding market outlook.
Traders face a "messy mix" of market forces,said chief investment strategist at Saxo. Tech stocks had been flying high,but worries about AI overvaluation are shifting sentiment . Kospi and Nikkei,stuffed with tech firms,feel the pain.
Kospi's circuit breaker kicked in for third time this year,showing how severe sell-off was . Comes after Wall Street's Friday slump,where Nasdaq fell ~4%,biggest drop in over a year. US interest rate hike fears are swirling,amid low unemployment and inflation linked to Middle East conflict.
In Europe,markets opened lower but didn't fall as hard as Asia. Germany's DAX slipped 0.9%,UK's FTSE 100 down 0.2%. Big South Korean tech names,like Samsung and SK Hynix,suffered major losses,Samsung shares closed down 10%.
Still,President Lee Jae-myung of South Korea sounded hopeful,calling domestic stocks "slightly undervalued." Kospi has seen big gains recently,driven by tech investment surge. But now investors want real proof AI demand turns into revenue,"the burden of proof has gone up."
Other Asian markets also closed lower. Hang Seng Index,Shanghai Composite both down. Taiwan's Taiex took a hit as TSMC shares fell 3%. TSMC supplies Nvidia . Nvidia CEO Jensen Huang said current tech stock dip could be buying chance .
As tensions rise,things stay fluid. Tehran warned strikes on Israel are just start of a military week,citing "repeated violation" of April ceasefire. Israel hit back at Iran military sites,even as Trump urged restraint.
Analysts warn if diplomacy fails,oil prices will stay volatile. Conflict's already hit Gulf oil and gas shipments,Iran threatened retaliation in Strait of Hormuz. Markets now weighing long-term impact on global energy flows…
