Asia markets tumble as Kospi circuit breaker triggers and oil climbs

Asian equity markets sank for a third straight session as investors rushed to de-risk amid the expanding US-Israel conflict with Iran and the prospect of an energy shock. South Korea's Kospi plunged by more than 10% in early trade, triggering an automatic 20-minute circuit-breaker halt — the exchange's first activation since August 2024 — with some snapshots showing two-day losses near 17%, the heaviest since 2009.

The rout hit export- and tech-sensitive markets hardest. Tokyo's Nikkei was reported about 4% lower in Asia morning trade, with other snapshots showing a 4.3% drop and session closes nearer 2.5%, reflecting different reporting points during the volatile session. Taiwan's market fell about 3.6% and Hong Kong's Hang Seng slid roughly 3%. A regional gauge of Asian equities excluding Japan fell roughly 4.2% on one measure. Fast-money and foreign investors were cited as bailing out of positions that had benefited from memory-chip and AI-driven gains, intensifying selling in semiconductor stocks.

Global markets also felt the shock. The UK's FTSE 100 closed about 2.75% lower while major German and French indexes lost more than 3.4%. In the United States, the S&P 500 opened sharply lower and pared losses to end nearly 1% down in one account, with other snapshots showing a close around 0.8% lower.

Oil rose for a third day as traders priced in supply risk from strikes and wider regional disruption. Brent futures were about 1% higher in Asia morning trade after a two-day surge, and one set of market snapshots put Brent up more than 13% for the week at $82.08 a barrel; an alternative snapshot showed a weekly gain above 12% at $81.40. Officials' moves to protect shipping helped temper spikes: President Donald Trump ordered an insurance guarantee for Gulf shipping and said the navy may escort oil tankers through the Strait of Hormuz, adding that Washington would provide risk insurance "at a very reasonable price" to shipping firms to "ensure the FREE FLOW of ENERGY to the WORLD."

The conflict has included repeated strikes and counterstrikes across the region. Iranian drones and missiles have struck Gulf oil refineries and US diplomatic facilities in Saudi Arabia and Kuwait, producing major disruption to shipping and commercial flights and creating direct risk to energy infrastructure and maritime routes.

Commodity and currency moves reflected the stress. Gold, which had been a strong gainer this year, fell about 4.5% in an overnight adjustment and was later reported to have steadied around $5,128 an ounce in some snapshots. The South Korean won slumped to a 17-year low, and the Australian dollar slid below $0.70 in one trading update.

"There are too many negatives to hold a bid," said Christopher Forbes, head of Asia and the Middle East at CMC Markets, summing the market mood. Damien Boey, a portfolio strategist at Wilson Asset Management in Sydney, said the conflict looks set to last longer than many expected and to broaden, adding that "oil infrastructure seems to be under attack ... so people are having to think about what is the duration of all of that."

Investors worry a sustained oil shock would raise inflation and push out expectations for central bank rate cuts, compounding losses in markets that had recently rallied. With shipping and energy routes at risk, export-reliant Asian economies face acute near-term pain, and markets are likely to remain volatile as the military and policy responses evolve.