Kospi slides as oil climbs above $90

South Korea’s Kospi index slumped as much as 4.5% on Monday as trading resumed after a holiday, marking a sharp setback for one of Asia’s major equity benchmarks. The decline was led by heavy selling in large technology and semiconductor stocks that have been central to the country’s equity market rally.

Chip bellwether Samsung Electronics lost about 4.4% in the session, while SK Hynix fell about 3.3%. These two memory-chip leaders carry significant weight in the index, so their declines exerted a strong drag on the broader market and underscored renewed caution around AI-related exposures.

The sell-off came as recently introduced single-stock leveraged exchange-traded funds tied to Samsung Electronics and SK Hynix faced rising criticism. Launched in May, these products are designed to deliver twice the daily returns of the underlying chip stocks, effectively magnifying gains and losses.

Regulators and market participants have expressed concern that these leveraged ETFs are amplifying swings in South Korea’s flagship AI and semiconductor stocks. With the Kospi down about 26% from its June peak, authorities have discussed potential measures such as higher minimum cash requirements and changes to trading-lot rules to mitigate side effects.

While Korean equities weakened, global oil benchmarks moved higher. Brent crude (UKOIL) for near-term delivery climbed above $90 a barrel, with reported prices around $90.40 to just under $91. U.S. West Texas Intermediate crude (USOIL) traded in the low-to-mid $80s, in a range of roughly $83.58 to $84.76.

The ascent in crude prices followed intensified U.S.-Iran military exchanges, including repeated strikes on Iranian targets. Shipping volumes through the Strait of Hormuz, a major transit route for global oil flows, have fallen, and regional energy infrastructure has been targeted in the hostilities.

Analysts noted that disruptions to tanker traffic through the Strait of Hormuz are tightening physical oil markets and supporting a geopolitical premium in prices. The combination of higher energy costs and rising geopolitical risk has reinforced a cautious stance among investors.

The simultaneous pressure on Korea’s chip-heavy equity market and the rise in crude benchmarks highlight how sector-specific leverage and global geopolitical tensions are interacting. Together, they have contributed to a risk-off tone, particularly in markets sensitive to AI demand, semiconductor cycles, and energy import costs.