TOKYO — Asian stock markets declined Tuesday as a technology sector sell-off extended from Wall Street, compounded by volatility in oil prices amid ongoing Middle East tensions.
Major benchmarks in the region fell, with South Korea’s KOSPI dropping more than 8 percent at one point before partially recovering, led by heavy losses in semiconductor shares. Japan’s Nikkei 225 also posted notable declines, reflecting broader pressure on tech-related stocks.
The downturn follows sharp losses in U.S. technology shares on Friday, with investors reassessing high valuations in artificial intelligence-linked companies after strong recent gains. Chipmakers and related suppliers across Asia faced selling pressure as concerns mounted over potential slowdowns in demand.
Oil prices fluctuated after reports of military exchanges between Iran and Israel, raising supply disruption fears in the region. Brent crude saw gains earlier before paring some advances as diplomatic efforts, including appeals from U.S. officials, sought to de-escalate the situation.
“Markets are navigating a combination of sector-specific corrections and geopolitical risks that are adding to volatility,” said a trader at a major Japanese brokerage, speaking on condition of anonymity.
South Korea’s benchmark, heavily weighted toward technology giants such as Samsung Electronics and SK Hynix, led regional losses. Trading was briefly halted amid the sharp moves. Japan’s export-oriented market also felt the impact from weaker sentiment in global tech. Hong Kong and mainland Chinese indices closed lower as well.
The technology sell-off comes after a prolonged period of gains driven by artificial intelligence optimism. Recent U.S. economic data, including stronger-than-expected jobs figures, also contributed to shifts in interest rate expectations, pressuring growth stocks.
Energy shares provided some offset in certain markets as oil volatility boosted related sectors. However, broader investor caution prevailed amid uncertainty over the duration of Middle East tensions and their potential effects on global supply chains and inflation.
Analysts noted that while some profit-taking was expected after recent rallies, the speed of the decline highlighted lingering sensitivities in the sector. Central banks and policymakers in the region continue to monitor developments closely.
As of Tuesday afternoon in Tokyo, trading remained active with investors awaiting further cues from U.S. markets and any updates on geopolitical developments. Additional data on corporate earnings and economic indicators this week are expected to influence near-term sentiment.
