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Asia’s stock markets dive amid Iran-Israel conflict, Wall Street jitters
TL;DR
Asia's stock markets have sharply declined due to renewed conflict between Israel and Iran, alongside rising U.S. interest rate hike expectations. South Korea's KOSPI index fell nearly 9%, triggering a trading halt for the second time this year.
Key points
- Asia's stock markets dropped sharply
- Conflict between Israel and Iran resumed
- Expectations of U.S. interest rate hikes increased
- South Korea's KOSPI fell nearly 9%
- Circuit breaker activated for the second time this year
Mentioned in this story
Korea ExchangeSouth KoreaIranIsrael
KOSPI
Asia’s major stock markets have dropped sharply amid the resumption of conflict between Israel and Iran and growing expectations of interest rate hikes in the United States.
South Korea’s stock market suffered the steepest losses amid a region-wide sell-off on Monday, as investors followed Wall Street’s lead to unload high-priced tech equities linked to AI.
The benchmark KOSPI fell nearly 9 percent in early morning trading, triggering the exchange’s circuit breaker for the second time this year.
The Korea Exchange last activated the circuit breaker, which halts trading for 20 minutes to prevent panic selling, on March 4, when the index plunged a record 12.06 percent.
The KOSPI, which has been the best-performing major index in 2026, closed the day 8.29 percent lower after the resumption of trading.
Chip giants Samsung Electronics and SK Hynix, South Korea’s two biggest firms by market capitalisation, both suffered heavy losses, dropping 10.2 percent and 7.6 percent, respectively.
Elsewhere in Asia, Japan’s benchmark Nikkei 225 fell 3.9 percent, while the SSE Composite Index in Shanghai and Hang Seng Index in Hong Kong slid 1.7 percent and 1.3 percent, respectively.
Taiwan’s TAIEX, which is dominated by the world’s largest contract chip maker TSMC, slumped 3.5 percent.
Brent crude, the international benchmark for oil prices, rose 3.7 percent, topping $88.50 a barrel.
The equities sell-off came as Iran and Israel traded fire for the first time since April, and after the release of better-than-expected jobs data in the US last week stoked fears of interest rate hikes by the US Federal Reserve.
All three of Wall Street’s main indexes fell on Friday, with the tech-heavy Nasdaq Composite slumping 4.18 percent for its worst day since April 2025.
“The sharp declines have been triggered by the large correction in US tech last Friday following the blowout numbers on non-farm payrolls,” Fabien Yip, a market analyst at online trading and investment company IG Group, told Al Jazeera, referring to the strong jobs figures in the US.
“There was a spillover from the fading optimism on the AI trade, particularly affecting picks-and-shovels tech companies in Asia, which enjoyed a spectacular run in the past two months,” Yip said.
“Further, the weak won and potential tightening from South Korea could potentially add strain for the leveraged positions in Korea.”
Q&A
What caused the drop in Asia's stock markets?
The drop was primarily caused by the resumption of conflict between Israel and Iran and increasing expectations of interest rate hikes in the United States.
How much did South Korea's KOSPI index fall?
The KOSPI index fell nearly 9% in early morning trading, closing the day 8.29% lower.
What is a circuit breaker in stock trading?
A circuit breaker is a mechanism that temporarily halts trading to prevent panic selling, which was activated on the Korea Exchange after the KOSPI index's significant drop.
