KOSPI drops over 4% as oil spike, chip selloff rattle Asia

South Korea's Kospi tumbled 4.46% on Monday to close at 6,516.27, its lowest level since late April, as escalating U.S.-Iran tensions pushed crude oil prices above $90 per barrel and investors continued to unload semiconductor stocks. The tech-heavy Kosdaq fell 5.33% to 749.64, with sell-side sidecars activated in both markets as the selloff intensified.indiatvnews+1

Oil Spike and Geopolitics Drive Selling

The downturn was fueled by Brent crude's breach of $90 a barrel — its first time at that level since mid-June — after weekend escalation in the U.S.-Iran conflict threatened shipping through the Strait of Hormuz. According to Axios, the surge followed the deaths of three U.S. service members and expanding strikes between the two nations, with Iran's Supreme Leader accusing President Trump of violating the bilateral agreement. CNBC reported that Brent jumped nearly 4% overnight before easing back, while U.S. gasoline prices hit $4 per gallon again on Monday according to AAA.axios+1

In Seoul, Samsung Electronics and SK Hynix led declines, with leveraged exchange-traded funds tracking chip stocks amplifying the swings. The selloff followed a buildup of anxiety over the semiconductor sector during South Korea's Constitution Day holiday last week.ajupress

India Falls on Bank Earnings and Oil Fears

Indian markets also slid, with the BSE Sensex falling as much as 783 points intraday before closing down 442.93 points at 77,708.52. HDFC Bank and Axis Bank each dropped nearly 5% after disappointing quarterly margins, compounding concerns that elevated crude prices would weigh on the rupee and foreign portfolio investor flows. Reliance Industries bucked the trend, rising nearly 1% after reporting record quarterly core profit.theweek+2

China Bucks the Regional Trend

China's markets diverged from the regional selloff. The Shanghai Composite rose 0.9%, while Hong Kong's Hang Seng gained 2.0%, supported by enthusiasm around Alibaba ↘ 3.72%, which rallied after previewing its Qwen3.8-Max AI model over the weekend. The 2.4-trillion-parameter model, positioned as a challenger to leading systems from Anthropic and OpenAI, generated investor optimism about China's AI competitiveness. Japan's markets were closed for the Marine Day public holiday.cryptopolitan+4