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08/06/26
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Asian Stocks Tumble on Tech Selloff, Strong Dollar and Oil Spike
Asian equities fell sharply at the start of the week as investors reacted to a combination of weaker risk appetite in the United States, a stronger dollar and rising oil prices. The pullback in US technology shares at the end of last week and renewed concerns over the Middle East conflict encouraged traders to reduce exposure to regional stocks.
Japanese shares led the decline. The Nikkei 225 fell 3.6% to around 64,200 after briefly showing signs of stabilization. In South Korea, the KOSPI dropped 4.5% to near 7,800 and triggered a temporary trading halt after plunging more than 8% in early trade. Chipmakers were hit especially hard, with Samsung Electronics and SK Hynix each falling by more than 10%, dragging the broader index lower. Mainland Chinese and Hong Kong markets also weakened, with the Shanghai Composite and Hang Seng each down about 0.8%.
Indian markets are also expected to open lower. Futures tied to the Nifty indicated a decline of nearly 300 points, pointing to a negative start for domestic equities.
The sell-off in Asia followed a sharp decline in US technology stocks on Friday, when stronger-than-expected employment data fueled a rise in Treasury yields and the dollar. The stronger labor report reinforced expectations that the Federal Reserve may keep policy restrictive for longer, or even raise rates again this year. Market pricing now reflects a materially higher chance of at least one rate increase compared with last week.
At the same time, fresh fighting between Israel and Iran has lifted crude prices. That trend is a particular concern for Asian economies, many of which depend heavily on imported energy. Higher oil costs can pressure inflation, worsen trade balances and add to the case for caution in regional equity markets.
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