South Korea’s benchmark Kospi index fell 5% on Monday, signaling a deepening unwind in the artificial intelligence trade that has dominated Asian equity performance this year.
The sharp decline underscores growing investor anxiety over the sustainability of the tech rally, particularly as geopolitical risks in the Middle East intensify.
The sell-off was broad-based across technology-heavy indices, with emerging-market assets also coming under pressure.
While other Asian equities showed divergent performance, South Korea’s market suffered the most severe repricing, reflecting its heavy exposure to semiconductor and AI-related supply chains.
Compounding the equity weakness, oil prices climbed higher as tensions in the Gulf escalated.
The conflict has revived concerns over energy supply disruptions, adding a layer of macroeconomic uncertainty to an already fragile market sentiment.