South Korea’s stock market was forced to halt trading for 20 minutes on Monday as its Kospi index shed nearly 9% within minutes of opening, part of a wave of panic triggered by a sell-off in technology shares and renewed tensions between Iran and Israel.
By the close, the Kospi had fallen 8.3%, while Japan’s Nikkei index lost 3.9%. European markets also traded lower, though with much smaller falls than those seen in Asia. The sell-off followed a sharp drop on Friday on Wall Street, where the tech-heavy Nasdaq slid about 4% – its biggest one-day decline in more than a year – after a strong US jobs report raised the prospect of interest rates staying high or climbing further.
“Markets roiled by tech sell-off and Iran-Israel strikes; Kospi halted after 9% drop, as ceasefire call eases fears.”
On Monday, markets were also rattled by a rise in oil prices after Iran and Israel exchanged strikes for the first time since a ceasefire was agreed in April. Traders are nervously watching a “messy mix” of several shocks to the market, mainly tied to the tech sector and accelerated by rising energy prices, said Charu Chanana, chief investment strategist at Saxo.
Tech stocks have seen a strong run in recent weeks, but investors are “repositioning” over fears that investments in artificial intelligence may be overvalued, she said. Markets like the Kospi and Nikkei are particularly exposed because they are dominated by tech stocks. South Korean chipmakers Samsung closed down 10% and SK Hynix also fell sharply.
The Kospi’s halt on Monday was part of a circuit breaker mechanism designed to prevent panic trading, triggered for the third time this year. South Korean President Lee Jae-myung said the stock market was expected to experience volatility but he believed domestic shares were still “slightly undervalued”.
In the Middle East, fears of a return to full-scale regional war eased as Israel and Iran said they had halted attacks on each other after an appeal from Donald Trump to “immediately stop shooting”. Benjamin Netanyahu, Israel’s prime minister, acknowledged the pause in a televised speech but vowed to respond “with force” to future attacks. “At present, the fire on this front has been halted, because after the terrorist regime in Tehran was struck, it stopped attacking us,” he said.
The recent wave of Iranian ballistic missile attacks on Israel and retaliatory strikes by Israeli warplanes marked the most direct confrontation since the April ceasefire. Analysts described any new “ceasefire within the ceasefire” as very fragile, with multiple flashpoints that could lead to fresh exchanges at any moment.
Iran remained defiant. Mohammad Bagher Ghalibaf, Iran’s parliamentary speaker, said on Monday that Tehran would not tolerate “repeated violation”. “So long as you lack a genuine willingness to build trust, Iran’s response will remain the same,” he posted on X.
In the US, the tech-heavy Nasdaq closed up 0.9% on Monday, while the S&P 500 ended 0.3% higher, recovering some of Friday’s losses. The UK’s FTSE 100 reversed early losses to trade slightly higher. But investors remain on edge, seeking clear signs that AI demand has translated into “real revenue”, Chanana said. “The burden of proof has gone up.”