South Korea's Kospi drops 4.5% as some AI stocks swoon, while oil keeps
climbing
[July 20, 2026] By
CHAN HO-HIM
HONG KONG (AP) — Asian shares were mostly lower on Monday and South
Korea’s Kospi fell 4.5% as investors unloaded more stocks linked to
artificial intelligence.
Japan’s markets were closed Monday for a holiday. U.S. futures edged
lower.
Oil prices jumped as the U.S. and Iran moved closer to resuming an
all-out war. Early Monday, the U.S. announced more attacks for a ninth
straight night. Iran has been responding to U.S. strikes by hitting
U.S.-allies across the Middle East.
Brent crude, the international standard, rose 3.2% to $90.95 per barrel
and benchmark U.S. crude climbed 2.8% to $84.04 per barrel.
“The U.S. and Iran continue to exchange strikes, which are proving to be
deadly for both sides,” ING commodities strategists Warren Patterson and
Ewa Manthey wrote in a commentary Monday. “If this escalation goes
unchecked, we could return to an environment of wide-scale attacks
across the Persian Gulf.”
Tanker traffic in the Strait of Hormuz, a crucial waterway for global
oil transport, have nearly ground to a halt, adding to pressures on
supplies, they noted.
In Asian share trading the Kospi, which has benefited substantially from
the global AI frenzy, sank 4.5% to 6,516.27. Two of its most valuable
stocks booked losses. Samsung Electronics lost 4.7%, while memory chip
maker SK Hynix fell 4.5%.
Taiwan’s Taiex, also heavy in AI-related stocks, was 0.5% lower as its
leading chipmaker, TSMC, or Taiwan Semiconductor Manufacturing Co.,
climbed 1.3%. It had fallen 7.3% on Friday after the company announced
it plans to spend an additional $100 billion to expand its chipmaking
capacity in the U.S.
Hong Kong’s Hang Seng rose 1.7% to 24,984.24, while the Shanghai
Composite index edged 0.1% lower, to 3,761.40.
Australia’s S&P/ASX 200 fell 0.1% to 8,791.30.
India's Sensex slipped 0.7%.
AI-related shares including chipmaking stocks declined on Friday,
pulling world markets lower. Pledges of huge spending on AI are fueling
worries the sector may be in a bubble, and many investors have opted to
sell to lock in profits from recent big gains.
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The screen showing the Korea Composite Stock Price Index (KOSPI) is
placed at a dealing room of Hana Bank in Seoul, South Korea, Monday,
July 20, 2026. (AP Photo/Lee Jin-man)
 “The return to war in the Strait of
Hormuz may start to weigh more heavily on financial markets before
too long, especially if even strong tech earnings reports continue
to be met with scepticism,” Jonas Goltermann, chief markets
economist at Capital Economics wrote in a note Monday.
Markets were also shaken by the rollout of another powerful Chinese
AI model, this time by Beijing-based Moonshot AI.
The impact of the new Kimi K3 open-source AI model was similar to
when China’s “ DeepSeek moment” rattled world markets in early 2025.
It was viewed as another sign of how lower-cost, capable Chinese AI
models are increasingly challenging rivals like Anthropic’s Claude
and OpenAI’s GPT.
On Wall Street, the benchmark S&P 500 ended the week down 1% at
7,457.69. The Dow Jones Industrial Average fell 0.8% to 52,146.42,
while the technology-heavy Nasdaq composite lost 1.4% to 25,520.24.
Chipmaking stocks took a hit, with Nvidia falling 2.2%, while
Broadcom and AMD, or Advanced Micro Devices, fell 1%.
SpaceX, Elon Musk’s rocket company, dropped 5.4% after dropping
below its initial public offering price of $135 a share, reaching
its lowest point since its stock began public trading on the Nasdaq
last month.
In other dealings, the U.S. dollar fell to 162.40 Japanese yen from
162.43 yen. The euro was trading at $1.1437, down from $1.1438.
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