(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.