(Updates after market open in Tokyo and Seoul)
SINGAPORE, June 8 (Reuters) - Asian markets plunged on
Monday as investors slammed the brakes on the red-hot AI rally,
while Israeli strikes on Beirut sent oil prices and the dollar
higher.
An 8% drop for South Korea's chip-heavy KOSPI
benchmark triggered a 20-minute trading halt and has it down
almost 17% from last week's record high.
Japan's Nikkei fell 3.5% in early trade, though U.S.
S&P 500 and Nasdaq 100 futures made small gains.
The Nasdaq had dropped 4.2% on Friday, with selling
concentrated in semiconductor stocks after a hot jobs report
ramped up expectations for Federal Reserve interest rate hikes,
putting the brakes on what has been a sparkling AI-led rally.
Two-year Treasury yields rose more than 11 basis
points on Friday and benchmark 10-year Treasury futures
were about five ticks lower early on Monday morning in Asia.
"The AI-drives-everything narrative frayed last week," said
Bob Savage, head of markets macro strategy at BNY.
"Whether this is a healthy pause in the nine-week equity
rally or a top remains the key question. The IPO focus on SpaceX
and Anthropic is part of the pause - whether to make room for
the new market cap or to rethink value."
INFLATION AND ECB AHEAD
The week ahead is headlined by the giant SpaceX listing,
expected to price on Thursday and trade on Friday, but will also
have inflation in focus with U.S. consumer price data due on
Wednesday and central bank meetings in Canada and Europe.
Last week, bitcoin notched its heaviest weekly drop
since the collapse of crypto exchange FTX in late 2022, falling
about 16%. It was hovering just shy of $63,000 on Monday.
SpaceX's debut is expected to be followed by other mega IPOs
in the coming months from Anthropic and OpenAI, raising so much
money that brokers are nervous it could draw down other assets.
The Middle East situation also remains delicate, and Brent
crude futures were up about 2.6% to $95.45 a barrel on
Monday morning after an Israeli attack on Beirut prompted Iran
to direct a salvo of missiles at Israeli targets.
OPEC+ agreed on Sunday to the fourth increase in its oil
output targets in as many months.
In currency trade the dollar was firm and holding above 160
yen and pushed the Australian dollar to $0.7038.
The euro hovered at $1.1518.