Stock markets fall on tech plunge and renewed Middle East attacks

Global stock markets have fallen after a sharp sell-off in technology shares led to some bruising falls in Asia.

South Korea's stock market was forced to halt trading for 20 minutes on Monday after the Kospi index plunged by nearly 9% within minutes of opening.

The Kospi eventually closed down 8.3%, while Japan's Nikkei index fell by 3.8%. European markets opened lower, but saw much smaller falls than those seen in Asia.

Markets were also rattled by a rise in oil prices, fuelling concerns of inflation, after Iran and Israel exchanged strikes for the first time since a ceasefire was agreed between the sides and the US in April.

Traders are nervously watching a "messy mix" of several shocks to the market mainly tied to the tech sector and accelerated by rising energy prices, said chief investment strategist Charu Chanana from Saxo.

Tech stocks have seen a strong run in recent weeks, but investors are "repositioning" over fears the investments into artificial intelligence may be overvalued, she said.

Markets like the Kospi and Nikkei are particularly exposed to such shocks given their exchanges are dominated by tech stocks.

The Kospi's halt on Monday was part of a circuit breaker mechanism designed to prevent panic trading and was triggered for the third time this year following the plunge in tech stocks.

The losses follow a sharp drop on Wall Street on Friday, where a sell-off in tech stocks saw shares on the Nasdaq lose about 4% - its biggest drop in more than a year.

Part of the decline on Friday followed fears of a hike in US interest rates, due to a lower-than-expected US unemployment rate in April as well as persistently high inflation linked to the war in the Middle East.

In Europe, Germany' Dax index fell 0.9% on Monday while the UK's FTSE 100 slipped 0.2%.

Earlier, major South Korean tech companies had fallen sharply, including those of chipmakers Samsung, which closed down 10%, and SK Hynix.

South Korean President Lee Jae-myung said the stock market was expected to experience volatility but he believed domestic shares were still "slightly undervalued".

Overall, the tech-heavy Kospi has seen huge gains in recent months due to a wave of investment in the country's tech companies.

Investors are more looking for clear signs that AI demand has translated into "real revenue", Chanana said. "The burden of proof has gone up."

Other Asian stock exchanges, like the Hang Seng Index and the Shanghai Composite, all closed lower.

Taiwan's Taiex was also down sharply after shares of semiconductor giant TSMC fell by 3%. The chipmaker is a key supp