Key Takeaways

• KOSPI worst in Asia: South Korea’s index plunged as much as 8.8% on massive losses in chip heavyweights.
• Samsung falls 4.7%: The memory chip giant was among the biggest KOSPI drags.
• SK Hynix limits damage: Fell only 1.1% after announcing an advanced chips tie-up with Nvidia.
• Nikkei slides 3.6%: SoftBank lost 7.5%, while SUMCO and Renesas each tumbled over 10%.
• TOPIX drops 2.7%: Japan’s broader index also hit by a GDP downward revision.
• Japan Q1 GDP cut: Growth revised down to 1.8% from 2.1%, weighed by cooling business spending.
• BOJ rate hike doubts: Weaker GDP raises questions about the central bank’s headroom to raise rates next week.
• Wall Street’s Friday carnage: Major benchmarks fell between 1% and 4.5%; tech was the biggest decliner.
• Hot NFP fuels rate hike fears: A stronger-than-expected jobs report gives the Fed more cover to hold or raise rates.
• U.S. futures bounce: S&P 500 futures rose 0.2% and Nasdaq 100 futures gained 0.7% in Asian trade, hinting at a potential rebound.
• Iran fires missiles at Israel: Sunday’s exchange marked the first open hostilities since the April ceasefire — the most serious breach yet.
• Trump calls for Israeli restraint: The president urged Netanyahu not to retaliate, citing peace deal progress.
• Oil spikes: Crude surged on the military exchange, adding to inflation and rate hike fears.
• China falls: CSI 300 dropped 1.6%, Shanghai Composite lost 1.2%, Hang Seng shed 1%.
• Singapore loses 1.2%: Regional risk-off mood hits the city-state.
• India futures edge up 0.3%: Recovering after deep losses last week.

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Asian stocks fell sharply on Monday with technology and artificial intelligence stocks leading declines as investors collected big profits from a major rally in the sector, while worsening military tensions in the Middle East also weighed.

South Korea’s KOSPI was by far the worst performer in the region on deep losses in heavyweight chipmaking stocks, while Japan’s Nikkei 225 also tumbled on tech losses.

Regional markets took an extremely weak lead-in from Wall Street’s close on Friday, where major benchmarks tumbled between 1% and 4.5%. Tech was the biggest decliner, with a hotter-than-expected nonfarm payrolls reading also driving up expectations for interest rate hikes.

But S&P 500 futures and Nasdaq 100 futures rose 0.2% and 0.7%, respectively, in Asian trade, with investors looking to a potential rebound in U.S. tech shares from Friday’s slump.

KOSPI Slides 8%, Nikkei Down as Tech Stocks Tumble

South Korea’s KOSPI index was by far the worst performer in Asia, tumbling as much as 8.8% on sharp losses in local chip heavyweights.

Samsung Electronics Co Ltd and SK Hynix Inc — the two memory chip makers that had driven a bulk of the KOSPI’s recent gains — fell 4.7% and 1.1%, respectively. SK Hynix’s losses were limited by the company announcing an advanced chips tie-up with AI major Nvidia.

Gains in tech had seen the KOSPI largely outpace global stock markets so far this year, although this also left the sector vulnerable to profit-taking.

Japan’s Nikkei 225 index slid 3.6%, pressured chiefly by losses in local tech majors as investors questioned whether the AI tech rally had gone too far.

Tech major SoftBank Group Corp. slid 7.5% and was among the biggest weights on the Nikkei, while chipmaking majors including SUMCO Corp. and Renesas Electronics Corp. slid over 10% each.

Japan’s broader TOPIX index slid 2.7%, also spooked by a downward revision in the country’s first-quarter gross domestic product figures.

Japan’s economy grew 1.8% in the first quarter — lower than prior estimates of 2.1% — pressured chiefly by cooling business spending.

The print raised questions over the impact of the Iran war on growth, and also saw investors questioning whether the Bank of Japan will have enough headroom to raise interest rates next week.

Asia Stocks Slide on Iran-Israel Escalation and Rate Jitters

Beyond tech, broader Asian markets fell on Monday after Iran and Israel traded airstrikes on Sunday, marking their first open exchange of hostilities since an early-April ceasefire.

The development further undermined hopes for a lasting peace deal with Iran, even as U.S. President Donald Trump and other officials said an agreement was close. Trump had earlier on Sunday also called on Israel not to retaliate against Iranian strikes over the weekend, citing progress toward a peace deal.

Oil prices rose sharply on the weekend development, further spooking Asian markets. China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 1.6% and 1.2%, respectively, while Hong Kong’s Hang Seng shed 1%.

Singapore’s Straits Times Index fell 1.2%. Futures for India’s Nifty 50 index rose 0.3% after the Nifty logged deep losses last week.

Beyond geopolitics, Asian markets were also spooked by a strong U.S. nonfarm payrolls reading on Friday. Strength in jobs gives the Federal Reserve more headroom to maintain rates or even raise them — a trend that bodes poorly for risk-driven markets.